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Ghana to save $13.2bn from

renegotiated agreements with IPPs

GHANA GHANA’S Finance Minister Ken Ofori-Atta has national debt.
said that the government expects to save some Ofori-Atta said the renegotiated PPAs with
$13.2bn by having successfully renegotiated a six IPPs (Karpower, Cenpower, Early Power,
number of power purchase agreements (PPAs) Twin City Energy, AKSA Energy and Cenit)
with independent power producers (IPPs). would go a long way towards addressing the
Ghana introduced IPPs in 1998, adding to issue.
its state-owned utilities. Their participation “These renegotiated agreements are expected
has steadily grown since 2004, when the ther- to have savings estimated at $13.2bn over the life
mal Takoradi Power Station was first built in of the PPAs through a combination of reduced
Aboadze, with them approaching public gener- capacity and energy charges,” Ofori-Atta told
ation in terms of capacity five years ago. lawmakers presenting the mid-year budget
A decade ago, Ghana went into a power plant review this week.
construction overdrive, resulting in generation “[We] have seen in this country the damage
capacity equalling twice the country’s demand that disruptions in power supply causes to busi-
by 2018, according to The Conversation, which nesses, large and small, from factories to hair-
notes that the installed capacity is 5,083MW, dresser salons,” he said, going on to highlight a
almost double the peak demand of 2,700MW. number of projects completed this year as part of
“The government’s distribution utility must measures to improve the transmission, reliability
pay private electricity companies typically for and accessibility of power supply.
90% of the power they make available, regardless Some 58 communities have been connected
of whether it is used,” writes The Conversation, to the national electricity grid from January to
a collaboration between academics and journal- June this year, Ofori-Atta said.
ists, noting a glut of energy costs the government Delivering the 2022 State of the Nation
about 5% of GDP. Address in March, President Nana Addo
“Ghana’s large imbalances in supply and Dankwa Akufo-Addo said 279 communities
demand leave the utility with a hefty bill, reach- had been connected to the national electricity
ing an annual deficit of $1bn,” the publication grid under the National Electrification Scheme.
said, noting the significance of renegotiating The development, he said, increased the national
deals with IPPs, and that Fitch Ratings ranks electricity access rate from 85.17% in 2020 to
the energy sector as the biggest driver of Ghana’s 87.03% as of January 2022.™

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