Government has placed a temporary freeze on payments to independent power producers as it bids to renegotiate power purchasing agreements signed with the previous administration.
A statement by the Finance Ministry announced this development further reiterating the establishment of a steering committee under the Energy Sector Recovery Task Force to engage with each IPP and gas suppliers to resolve the Take-or-Pay power contracts crippling the country’s energy sector.
According to the statement, the collaborative consultation process is welcomed by the investor community as it will provide a forum for stakeholders to contribute to Ghana’s energy strategy, which is fundamental to the country’s industrialisation and sustainable growth.
“To allow time for the ongoing collaborative consultation process with the IPPs and GSs, Government considers it appropriate to place a hold a hold on its initial instructions issued on 1st August, 2019 whereby government instructed Electricity Company of Ghana Limited (“ECG”), Ghana National Petroleum Corporation (“GNPC”) and Power Distribution Services (“PDS”) to pay only for power/gas consumed,” the Finance Ministry added.
The Finance Minister in his mid-year budget review said it costs the country more than US$500 million per annum paying for power which is not consumed.