Renegotiated Energy Debt To Save Ghana $6.6bn Over Lifetime Of Power Purchase Agreements – Finance Minister
Ghana’s Finance Minister, Dr. Mohammed Amin Adam, has announced the successful conclusion of negotiations with five of the country’s seven Independent Power Producers (IPPs), yielding an estimated $6.6 billion in savings over the lifetime of the Power Purchase Agreements (PPAs).
This milestone was revealed during the presentation of the 2024 Mid-Year Budget Review in Parliament on July 23.
“We have concluded our negotiations with five of the seven Independent Power Producers, which will lead to a saving of some US$6.6 billion over the lifetime of the Power Purchase Agreements (PPAs),” Dr. Amin Adam stated.
The Government Negotiating Team (GNT) was tasked with restructuring the legacy debt owed to the IPPs, which include AKSA, Amandi, CENIT, Cenpower, Karpowership, Early Power, and Sunon Asogli.
Earlier this month, in a joint press briefing with the IMF and Bank of Ghana, Dr. Amin Adam confirmed that commercial agreements on debt restructuring terms and renegotiated PPA terms had been reached with Amandi, Cenpower, Early Power, CENIT, and AKSA.
However, negotiations with Sunon Asogli and Karpowership are still ongoing, as these companies have yet to agree to the government’s debt restructuring terms.
“As part of the implementation of the Energy Sector Recovery Programme (ESRP), Government has, for some time now, been negotiating with the energy sector Independent Power Producers (IPPs) to restructure legacy debt of over a US$1 billion owed to the IPPs and Power Purchase Agreements (PPAs) to address the accumulation of arrears in the energy sector and work towards implementing critically needed reforms to make the sector more financially sustainable,” he noted.
“The final round of negotiations in June 2024 after several months of negotiations resulted in commercial agreements being reached on headline debt restructuring terms and renegotiated PPA terms with Amandi, Cenpower, Early Power, CENIT and AKSA,” the Finance Minister added.
These agreements mark a significant step towards addressing the financial challenges within Ghana’s energy sector.
