- Plans to refinance power sector loans
- Renegotiation of power contracts began in 2019
- Ghana power sector suffers from increasing debt.
The Ghanaian government has agreed to refinance loans in the power sector to cut its increasing debt profile in the sector. The Independent Power Producer (IPPs) had agreed to the government’s plans to refinance power sector loans following negotiations in November 2019.
The refinancing investment will be carried out through the Ghana Infrastructure Investment Fund using proceeds from the Eurobond sale of 2020. To save reduce tariff costs, some of the IPPs have agreed to switch to cheaper energy sources; however, the IPPs have refused to discontinue the take-or-pay obligations. The plans to switch to cheaper energy sources will save the Ghanaian government $5 billion in tariff costs.
The Ministry of Finance spokesperson has said, “Refinancing expensive debt on the books of the independent power producers will reduce the cost of power even further”. The Chief Executive Officer (CEO) Chamber of Independent Power Producers, Elikplim Apetorgbor, has said the Chamber is open to negotiations with the government. “We are open to a more strategic cooperation that will result in a strong and resilient energy sector for the good of Ghana’s economy and development,” he said.