The Finance Minister reports that the government has disbursed over $400 million to Independent Power Producers (IPPs) to prevent the shutdown of their plants.
Finance Minister Dr. Mohammed Amin Adam revealed that $400 million has been paid to five independent power producers (IPPs) as part of a debt settlement agreement.
The payment is part of an agreement reached with five of the seven independent IPPs to settle outstanding debts.
During a joint press conference with the Ministry of Finance, Bank of Ghana, and the International Monetary Fund (IMF) in Accra on Monday, July 1, Dr. Amin Adam confirmed that the threat of plant shutdowns by the IPPs has been averted due to this agreement.
“We have reached an agreement with Aksa Energy, Amandi Energy, Cenit Energy, Cenpower Generations, and Early Power,” he said. “Out of seven IPPs, we have agreements with five, which is very positive for our country.”
“We are committed to ensuring that threats of shutting down power plants will become a thing of the past. We have already begun fulfilling our obligations under the agreement, with the government having paid over $400 million to all IPPs so far,” said Finance Minister Dr. Mohammed Amin Adam.
He further explained, “As part of implementing the Energy Sector Recovery Programme (ESRP), the government has been negotiating with energy sector Independent Power Producers (IPPs) to restructure legacy debt of over $1 billion and address the accumulation of arrears. This also involves necessary reforms to make the sector financially sustainable.”
“A Government Negotiating Team (GNT) was tasked with restructuring the debt owed to IPPs, including AKSA, Amandi, CENIT, Cenpower, Karpowership, Early Power, and Sunon Asogli. The GNT was also responsible for finalizing matters related to the restructuring of Power Purchase Agreements (PPAs) with the Electricity Company of Ghana (ECG). The main objectives were to restructure the legacy debt, amend the PPAs and project documents, and ensure that ECG remains current on its payment obligations to IPPs.”
“The final round of negotiations in June 2024 resulted in several key outcomes:
1. Commercial agreements on debt restructuring and renegotiated PPA terms were reached with Amandi, Cenpower, Early Power, CENIT, and AKSA.
2. The amended documentation for Amandi, Cenpower, and Early Power will require Parliamentary approval, and the GNT aims to secure the necessary regulatory, ministerial, and other approvals before Parliament adjourns at the end of July 2024.
3. Work is ongoing to finalize the restructuring package for Sunon Asogli.
4. ECG and GNPC have agreed on master gas supply arrangements, where GNPC will sell fuel in bulk to ECG for supply to the IPPs as part of a tolling arrangement. These gas supply arrangements are central to the restructuring process.
5. The GNT is also working to finalize the restructuring with Karpowership as soon as possible.”
