The Minority in Parliament is doubting the comments by the Finance Minister that the government has restructured the debt of the Independent Power Producers (IPPs). Member of Parliament for Yapei Kusawgu said that anytime the government says that they are restructuring or renegotiating any energy sector contract, it ends up being bloated, it ends up
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The Minority in Parliament is doubting the comments by the Finance Minister that the government has restructured the debt of the Independent Power Producers (IPPs).
Member of Parliament for Yapei Kusawgu said that anytime the government says that they are restructuring or renegotiating any energy sector contract, it ends up being bloated, it ends up causing serious liability.
His comments come after the Finance Minister Dr Mohammed Amin Adam revealed that an amount of $ 400 million has been paid to five IPPs as part of the debt settlement.
The payment formed part of the implementation of the agreement that the government has reached an agreement with five out of the seven independent IPPs over debt settlement.
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.
LIVESTREAM OF A JOINT PRESS BRIEFING WITH THE IMF ON GHANA’S ECONOMYHTTPS://T.CO/OERDZVPRE4
— MINISTRY OF FINANCE, GHANA (@MOF_GHANA) JULY 1, 2024
“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.”
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.”
But speaking to journalists on Tuesday July 2, Mr Jinapir said “So unfortunately, once again, this so-called restructuring of IPP debt, is nothing but a charade. In 2020, the government borrowed 3 billion Eurobond and promised us that they would use $1 billion to restructure IPP liabilities. As soon as the government got the money, they misused and misapplied that money.
“Our latest check indicates that that money cannot be accounted for. Anytime the NPP tells you they are restructuring or renegotiating any energy sector contract, it ends up being bloated, it ends up causing serious liability. This is the time for the president to swallow his pride, for the head of the common amendment team, Dr Bawumia, to swallow his pride and call for a national dialogue on the state of Ghana’s economy.
“This pretence of wishy-washy arguments and trial to obfuscate the real facts would not help. I think that is the time for Ghanaians to know what lies ahead for them in the future, so that whichever government would be assuming office from 2025 would be realistic, real with the people, and come up with pragmatic measures to resolve the problems confronting us.”
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