Ghana’s Minister for Energy and Green Transition, John Abdulai Jinapor, has revealed that the government’s latest renegotiation with Independent Power Producers (IPPs) will save the nation an estimated US$300 million, marking a major step toward stabilising the country’s energy sector.
Speaking during a working visit to the Volta River Authority (VRA), the minister described the agreement as a “strategic win” that reflects the government’s commitment to ensuring value for money and easing the financial strain caused by legacy power purchase contracts.
Mr. Jinapor noted that although previous administrations had initiated similar renegotiations, the current government had secured better terms that would deliver more substantial financial relief to the state.
“The renegotiation process is yielding positive results. From the figures we have now, Ghana stands to save close to $300 million. This shows the progress we’re making in cleaning up the sector,” he said.
He emphasised the need for collaboration beyond politics, describing the energy sector as a vital pillar of national development that should be managed with professionalism rather than partisanship.
“This is not about which government started what. The important thing is continuity and improvement. Let’s put Ghana first, because when we fix this sector, we fix the foundation of our economy,” he urged.
The minister also expressed concern about the rising fiscal burden within the energy industry, revealing that the GH¢28 billion allocated to the sector in the 2025 budget is being used primarily to clear existing shortfalls, leaving little room for new investments.
“This year’s GH¢28 billion allocation is going into settling energy sector arrears. If we don’t manage this trend, we could be spending over GH¢35 billion next year just to pay off debts,” he cautioned.
Mr. Jinapor explained that the country’s dependence on expensive IPP power contracts had become unsustainable, adding that similar funds could have been channelled into expanding VRA’s generation capacity to produce affordable power domestically.
“We pay close to US$70 million every month to IPPs. If these funds had been reinvested in VRA over the years, Ghana would have built more thermal plants and achieved cheaper, self-sufficient power,” he observed.
He also criticised the tariff imbalance that often favours private producers over state-owned entities, calling for reforms that will ensure fair treatment across the sector.
“We strictly enforce tariffs for IPPs but hesitate when it comes to VRA. This imbalance must change if we want to achieve real stability,” he stressed.
Mr. Jinapor concluded by urging all players within the energy ecosystem to adopt a united, results-driven mindset aimed at ensuring reliable power supply and financial sustainability for Ghana’s long-term growth.
Discover more from Hot Stories Ghana
Subscribe to get the latest posts sent to your email.
