The Minority challenges government’s assertions of restructuring $1 billion legacy debt with IPPs.

The Minority in Parliament has contested the government’s assertion of successfully restructuring a $1 billion debt owed to Independent Power Producers (IPPs).

Finance Minister Dr. Mohammed Amin Adam, speaking at a joint press conference on July 1, 2024, alongside the Bank of Ghana (BoG) and the International Monetary Fund (IMF), announced the completion of negotiations with IPPs. This restructuring, according to him, aims to create fiscal space and enhance the energy sector.

The negotiations, spanning several months, focused on restructuring Power Purchase Agreements (PPAs) and clearing arrears accumulated during years of financial strain in the energy sector.

Minister Amin Adam emphasized the strategic significance of these agreements in revitalizing Ghana’s energy infrastructure and fostering economic growth.

However, the Minority contends that no agreement has been reached. John Jinapor, the ranking Member on the Mines and Energy Committee, alleged in media statements that the government had misused and misapplied the $1 billion borrowed in 2020 for the same purpose.

He called for a national dialogue on Ghana’s economic state, accusing the government of obscuring facts and failing to offer practical solutions to the country’s economic challenges.

“Unfortunately, once again, this so-called restructuring of IPP debt is nothing but a charade. In 2020, the government borrowed €3 billion through Eurobonds and pledged $1 billion for restructuring IPP liabilities. However, upon receiving the funds, the government allegedly misused them, and their current whereabouts cannot be accounted for.

“Whenever the NPP claims to be restructuring or renegotiating any energy sector contract, it invariably leads to bloat and substantial liabilities. This is a critical juncture for the President and Dr. Bawumia, the head of the economic management team, to set aside pride and initiate a national dialogue on Ghana’s economic realities.

“This pretense and attempts to obscure facts will not serve the nation well. It’s time for Ghanaians to be informed about the challenges ahead, so that any government taking office from 2025 onwards can be candid, realistic, and implement practical measures to address our issues.