The Government has successfully renegotiated Power Purchase Agreements (PPAs) with six Independent Power Producers (IPPs) in the country, the Minister of Finance, Ken Ofori-Atta, has announced.
The IPPs are Karpower, Cenpower, Early Power, Twin City Energy (formerly Amandi), AKSA Energy and Cenit.
In what has been described by analysts as a positive step towards saving the country some funds for other developments, he said the action was expected to save the country about $13.2 billion over the life span of the PPAs.
Presenting the 2022 Mid-year Budget Review to Parliament, Mr Ofori-Atta said “for balanced, sustainable energy partnerships that provide affordable power for industrial, commercial and residential use we have kept our promise and successfully negotiated PPAs with six IPPs.”
“These renegotiated agreements are expected to have savings estimated at $13.2 billion over the life of the PPAs through a combination of reduced capacity and energy charges,” he stated.
The Finance Minister also noted that the raft of sanctions imposed on Russia were tightening supply conditions for energy products.
In response, he said the government was closely monitoring the stock of products at all depots.
He said the timely intervention of the Bank of Ghana through the Special Forex Auction mechanism was also expected to sustain continuous supply of petroleum products in the country.
Mr Ofori-Atta also noted that the government would continue to make significant investments towards the development of a modern railway network.
“We believe in this because we know that creating an alternative means of transport, especially for goods, will ease the pressures on our roads and future impacts of global crude price hikes on farm produce, for example,” he stated.
He said the government was within target to complete the construction of the new Tema to Mpakadan Railway line by the end of this year.
“The project is currently about 92 per cent complete. The operationalisation of the project is expected to enhance efficiency at the Tema Port and provide the shortest transportation route between the southern and northern parts of Ghana,” he said.
Strategic Anchor Industries
The Finance Minister pointed out that despite global supply chain disruptions, the Ghana Automotive Development Programme under the Strategic Anchor Industries Initiative continued to attract investments.
“In April 2022, Nissan commissioned the largest automotive assembly plant in Ghana (in Tema), with the capacity to assemble over 31,000 vehicles per annum.
“The expected commissioning of four additional plants this year, bringing the total to nine global brands, will make this nation a true hub for automobiles in the sub-region,” he noted.
One District One Factory (1D1F)
Commenting on the one district one factory (1D1F) initiative which is one of the government’s flagship programmes, Mr Ofori-Atta said the President’s vision to see Ghana producing for itself and her neighbours was going as planned.
He said out of the 296 1D1F projects undertaken since 2017, 125 were currently operational across the country.
“This is by far the biggest industrialisation programme our country has seen since colonial days.
“Our industrialisation agenda is progressing steadily and we will urge more investors to see the current global supply chain challenges as rather an opportunity to invest in Ghana now, the commercial centre of the Africa Continental Free Trade Area,” he advised.
He said the government, for its part, would continue to support 1D1F firms with technical assistance, tax incentives and access to credit, including interest payment subsidy support to de-risk lending to create jobs and promote export orientation for transformation.