Govt has Reached Agreement with 5 Independent Power Producers – Finance Minister

Govt has Reached Agreement with 5 Independent Power Producers – Finance Minister
Govt has Reached Agreement with 5 Independent Power Producers – Finance Minister

Africa-Press – Ghana. The Finance Minister Dr Mohammed Amin Adam has revealed that the government has reached an agreement with five out of the seven independent power producers (IPPs) over debt settlement.

As part of the agreement the government has paid an amount of $ 400 million to the IPPs, he said.

Speaking during a joint Ministry of Finance, Bank of Ghana, and International Monetary Fund (IMF) press conference on the disbursement of the $360 million third tranche, in Accra on Monday, July 1, Dr Amin Adam stated that the threats that the IPPs issued to shut down their plant will not happen because of the agreement.

He said “we have reached an agreement with Aksa Energy, Amandi Energy, Cenit Energy, Cenpower Generations and Early Power.”

“We have seven IPPs and we have reached an agreement with five, which is very positive for our country. “It tells us that the threats of shutting down power plants will be a thing of the past because we are committed to implementing the terms of this agreement. we already have started performing on our side and to date government has paid in excess of 400 million dollars to all IPPs as part of our performance of the agreement that we just reached.”

IPPs abort threat to shut down as ECG settles debt

He further stated that “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 illion 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.

“A Government Negotiating Team (GNT) was mandated to restructure legacy debt owed to the IPPs, namely AKSA, Amandi, CENIT, Cenpower, Karpowership, Early Power and Sunon Asogli. In addition, the GNT was tasked to finalize any outstanding matters pertaining to the restructuring of the respective PPAs of the IPPs with the Electricity Company of Ghana (ECG). The key objective of the exercise was centred on the restructuring of legacy debt, necessary amendments to the PPAs and other project documents arising from the restructuring exercise, as well as ensuring that ECG remains current on its payment obligations to IPPs under the respective PPAs going forward.

“The final round of negotiations in June 2024 after several months of negotiations resulted in the following: i. commercial agreements have been reached on headline debt restructuring terms and renegotiated PPA terms with Amandi, Cenpower, Early Power, CENIT and AKSA. ii. The amended Amandi, Cenpower and Early Power documentation will require Parliamentary approval, and the GNT is pursuing an aggressive timeline aimed at securing various regulatory, Ministerial and other approvals prior to presentation of the amended documentation to Parliament for approval before Parliament rises at the end of July 2024; iii. Work on closing out and execution of the Sunon Asogli restructuring package/documentation is also in progress; iv. ECG and GNPC have agreed all commercial terms under master gas supply arrangements (with final technical details being considered) under which GNPC will sell to ECG fuel in bulk for onward supply to the IPPs, as part of the conversion to a tolling arrangement. The master gas supply arrangements between ECG and GNPC are central to the restructuring exercise; and v. The GNT is further engaging Karpowership to close out the Karpowership restructuring as soon as possible.”

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