GHANA’S independent power producers (IPPs) have firmly rejected a government proposal to restructure the $1.58bn in arrears owed to them by the state, raising concerns about a potential shutdown of their operations. The proposal was intended to help Ghana reduce its interest payments on external debt and implement a $3bn loan deal with the IMF. However, Elikplim Kwabla Apetorgbor, head of the Ghana Independent Power Producers (IPPs) Chamber, stated that the restructuring proposal had been unanimously rejected by the IPPs.
Apetorgbor emphasised the producers’ unwillingness to make concessions, stating that they were on the brink of shutting down their plants. In response, Minister of State at the Finance Ministry, Mohammed Amin Adam, expressed disappointment and affirmed the government’s commitment to engaging with the IPPs. He stressed the need for transparency and pragmatism in negotiations but rejected the notion of shutdown threats during ongoing discussions.
The IMF has attributed Ghana’s energy sector shortfalls to various factors, including low tariffs and excess capacity resulting from take-or-pay contracts, which have reportedly cost the government about 2 percent of GDP annually since 2019. Ghana recently increased electricity tariffs by 18.36 percent for the second quarter of 2023, following a nearly 30% hike in the previous quarter, with adjustments now planned on a quarterly basis, according to the utilities regulator.