Group Five said it had been informed by two of the bank guarantee providers that Cenpower had issued a written demand requesting that it be paid $62.7m. File Photo: IOL

PRETORIA – Group Five has applied to the high court in Johannesburg for an urgent interdict to stop the owners of the $410 million (R5.85 billion) Kpone gas and oil-fired power plant in Ghana from demanding payment of $62.7m from two of the bank guarantee providers for the project. 

The case commenced on Monday, but was postponed until today when judgment was expected to be handed down.

Themba Mosai, the chief executive of Group Five, confirmed yesterday that Cenpower Generation Company, the client, was defending the interdict application.

Group Five said it had been informed by two of the bank guarantee providers that Cenpower had issued a written demand requesting that it be paid $62.7m.

It said the demand by Cenpower has not been independently determined and did not reflect the counterclaims Group Five was legally entitled to and was pursuing.

“As the group believes this call is improper, it has instituted legal proceedings in the high court of Johannesburg to interdict the demands made by the client (Cenpower),” it said.

Mosai said Group Five was unable to comment on the quantum of its counterclaims, which were for time and money for various delays caused by Cenpower.

Cenpower is a special purpose vehicle created to develop the Cenpower Kpone Independent Power Plant in the Tema industrial zone close to Accra, the capital of Ghana.

The plant was scheduled to come on stream last year and, once commissioned, would be among the largest private independent power producers in Ghana, accounting for about 10 percent of the country's total installed capacity and about 15 percent of its available thermal generation capacity.

Group Five was awarded the contract in 2015 and it was expected to take three years to complete. However, the project has been marred by many delays.

The group said last month that it was estimated the Kpone contract would be completed and handed over that month.

Group Five said yesterday that the final commissioning phase continued, as committed, but commissioning could currently not be completed, with the key delay now due to the contamination of the fuel being provided to the group by Cenpower.

“The provision of fuel is the client’s responsibility. The completion and handover date will therefore be delayed, as it was dependent on the resolution of the fuel contamination.”

Group Five said it continued to progress its contractual rights and entitlements through the alternative dispute resolution procedures, adding these had been significantly progressed last month by a submission to the International Chamber of Commerce (ICC) in Paris in relation to claims against Cenpower.

Mosai said the contract stipulated the use of the ICC in any dispute resolution process. Various matters to be heard by the ICC were at different stages of referral but the main claim was now before the ICC, he said.

Group Five said its board and executive management continued to implement strong actions to assess the group's ongoing financial position.