$1bn Energy Sector Legacy Debt: Finance Minister confirms debt settlement negotiations with 5 out of 7 IPPs
Ghana’s Finance Minister, Dr Mohammed Amin Adam, has announced that the government has successfully negotiated debt settlement agreements with five of the country’s seven Independent Power Producers (IPPs).
This development comes after a 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.
The Finance Minister in a joint press briefing with the IMF and Bank of Ghana, confirmed that the government has reached commercial agreements on debt restructuring terms and renegotiated Power Purchase Agreement (PPA) terms with Amandi, Cenpower, Early Power, CENIT, and AKSA with these agreements marking a significant step in addressing the financial challenges within Ghana’s energy sector.
Sunon Asogli and Karpowership are, however, yet to agree to 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.
Speaking further at the press briefing, the Finance Minister noted that Government Negotiating Team is pursuing an aggressive timeline aimed at securing various regulatory, Ministerial and other approvals prior to the presentation of the amended documentation on the restructured legacy debts owed IPPs to Parliament for approval before Parliament goes on recess at the end of July.
“Work on the closing out and execution of the Sunon Asogli restructuring package/documentation is also in progress, the GNT is further engaging Karpowership to close out the Karpowership restructuring as soon as possible,” he added.
