Dr. Ousman Gajigo
Newspapers recently reported that the government of The Gambia still owes Karpowership an arrear of $19.6 million. That amount is nothing compared to what the government of Adama Barrow has squandered in its dealings with this company. Karpowership is a Turkish company that owns a fleet of ships from which it sells electricity – basically an electricity company with floating power plants. The government of The Gambia bought electricity from this company for seven years between 2018 and 2024.
The contract with this company represents an unprecedented squandering of resources for a country like ours. An agreement between a national utility and a company that generates electricity is called a power purchase agreement (PPA). It is usually a long-term contract that typically exceeds 10 years. In emergency situations, it can be reasonable for a country to buy electricity over a short period. The key words here are “emergency” and “short-term.”
NAWEC signed a series of consecutive short-term contracts with Karpowership totaling seven years. This is essentially a long-term contract. The Karpowership ship docked in Banjul provided 30 megawatts (MW) of electricity. The government, through NAWEC, paid an annual fee of over $30 million – in effect, more than $1 million per MW for seven years. As someone who has worked on many energy transactions around the world, this is probably the worst power purchase agreement in the history of energy transactions. Here is why this arrangement is so financially boneheaded.
To develop and build a thermal power plant, a basic rule of thumb is that 1 MW costs about $1 million. Therefore, it usually costs about $30 million to build a 30MW thermal power plant that uses heavy fuel oil. To build a similar 100MW power plant, one would need about $100 million.
In other words, NAWEC was paying Karpowership the equivalent of constructing an entire power plant on an annual basis. Imagine a scenario where someone constructs a house for D5 million and decides to charge a tenant a rental rate of D5 million per year. Who in their right mind would accept such a terrible rental contract? Apparently, the government of The Gambia found such a deal acceptable because this was essentially the contract with Karpowership for seven years.
As a result of this terrible contract, the government paid over $30 million per year for seven years. This is equivalent to over $200 million, which equals at least D12 billion based on the average exchange rate between 2018 and 2024.
If the government had used that amount to build a power plant in the country, we could have constructed a 200MW power plant capable of providing electricity to more than 300,000 households based on our current average electricity consumption. In the latest population census, The Gambia had fewer than 300,000 households. In other words, The Gambia could not only have solved our electricity problem but could have even sold electricity to Senegal and Guinea-Bissau, thereby significantly improving our balance of payments.
Another way to appreciate how financially disastrous this contract was is to compare the payment to Karpowership with budget allocations to key sectors in the 2026 budget. The amount the government paid to Karpowership is more than our total budget for the entire agricultural sector. The amount is more than double the allocation to the education sector. The amount is more than double the allocation to the health sector.
The Karpowership deal also contributed significantly to our national debt. This is because the government had to allocate more than D1 billion per year to paying NAWEC’s arrears to Karpowership. For instance, the government allocated D1.5 billion in the 2025 budget for NAWEC to pay Karpowership, which added to our debt.
How can a government that misallocates such an amount ever be trusted to develop the country? In any well-functioning country, the officials who originated this terrible deal with Karpowership would have faced a criminal court for economic crimes against the state. The conclusion is clear: Adama Barrow and his administration will ruin this country if we do not remove him in December 2026.
