Minister of State at the Finance Ministry, Abena Osei Asare, has highlighted that the government under President Akufo-Addo has achieved substantial savings through the renegotiation of agreements with Independent Power Producers (IPPs).
She characterized the agreements from the previous Mahama administration as costly and in need of renegotiation.
During the State of the Nation Address on February 27, President Akufo-Addo announced that the government’s negotiating team had successfully reached commercial agreements on headline terms for restructuring power purchase agreements and settling arrears with affected IPPs, including AKSA, Amandi, Cenpower, CENIT, and Early Power.
President Akufo-Addo revealed that the negotiations uncovered that the reported debt of US$1.6 billion owed to the IPPs was actually US$1.2 billion, resulting in savings of US$400 million.
Additionally, a fixed monthly energy purchase price was secured with all IPPs, leading to a monthly payment of US$43 million instead of US$77 million, resulting in monthly savings of US$34 million and a significant reduction in payments compared to the inherited ‘Take-or-Pay’ system.
“In the meantime, ECG has been able to secure a fixed monthly energy purchase price with all the IPPs.
“This has led to a monthly payment of US$43 million, instead of US$77m, that is monthly savings of US$34 m 44 reduction in monthly payments, a far better outcome than the ‘Take-or-Pay’ system we inherited,” the President said.
“When the president came to parliament with the SONA, he mentioned that we have been able to renegotiate some of these expensive IPPs that the previous government entered into. we have done some renegotiations and that has resulted in 44 percent.
“If you look at the quantum of the 44 percent I don’t think you will be asking whether it is satisfactory enough, we have saved enough money.”
In an interview with TV3’s Beatrice Adu on March 11, Madam Osei Asare emphasized the success of the renegotiations, stating, “If you look at the quantum of the 44 percent, I don’t think you will be asking whether it is satisfactory enough; we have saved enough money.”