Gov’t completes renegotiation and restructuring of Power Purchase Agreements

As part of efforts to ensure power is affordable for industrial, commercial, and residential use, the Government has completed a renegotiation and restructuring exercise of Power Purchase Agreements (“PPAs”) with six operational Independent Power Producers (“IPPs”).

The new six agreements when finalised and executed will offer an estimated nominal savings of more than US$4 billion (with a Net Present Value of approximately US$3.5 billion) over the next five years.

Mr Ken Ofori-Atta, the Minister of Finance, made this known when he presented the 2023 Budget Statement and Economic Policy in Parliament dubbed “NKABOM” Budget.

The budget is on the theme: “Restoring and Sustaining Macroeconomic Stability and Resilience through Inclusive Growth and Value Addition”.

He said the savings were expected to accrue from a combination of reduced capacity and energy charges across the IPPs.

The Minister said a total savings of US$12 billion was expected when all agreements were finalised and executed.

On Climate Change, the Government at COP27, took the opportunity to leverage bilateral engagements to expand consultations on debt-for-nature swaps as well as increase private sector investments as key opportunities for accelerating the transition to low carbon growth, the Minister said.

He said by addressing the dual crises of debt and climate change, Ghana would build a climate-proof resilience into the economy, which would better equip the country to handle future shocks and protect existing infrastructure, property lives, and livelihoods.

The Minister said as part of efforts to mobilise more financing for the country’s transition into a low-carbon economy, the Government would continue to engage the private sector to invest more private capital, through PPPs for climate-resilient infrastructure products as well as for the voluntary and compliance carbon markets.