Government’s New IPP Deal to Save Ghana $300 Million — Energy Minister Jinapor

1. The Minister for Energy and Green Transition, John Abdulai Jinapor, has revealed that government has reached a fresh agreement with Independent Power Producers (IPPs) that is expected to save Ghana about US$300 million.

Speaking during an engagement with officials of the Volta River Authority (VRA) as part of his working visit, the minister stressed the importance of keeping politics out of the energy sector, describing it as a national asset that demands unity, professionalism, and shared responsibility.

Mr. Jinapor acknowledged that while the previous administration began renegotiations with IPPs, the current government has gone further to improve the terms to secure greater value for the country.

“This sector is experiencing significant progress,” he said. “We’ve renegotiated with the IPPs, and based on the numbers I’ve seen, we are saving about US$300 million from those agreements.”

He commended the efforts of the previous government for initiating the process, emphasizing that energy challenges must be tackled as a collective national issue, not a partisan one.

“The previous administration did their bit. We’ve come to improve on it — and that’s how it should be,” he said. “It’s not always about politics. Let’s put the nation first. Whether NDC or NPP, let’s work together for Ghana. Before the next four years, let’s put VRA first and turn this sector around.”

The minister also expressed worry about the growing financial burden in the energy sector, revealing that the GH¢28 billion allocation in this year’s budget is being used mainly to clear energy sector debts instead of funding new investments.

“This year’s budget gives us GH¢28 billion — not for new projects, but to pay shortfalls,” he cautioned. “If this trend continues, next year it could reach GH¢35 billion. Eventually, energy shortfalls alone could consume the entire national budget.”

Mr. Jinapor further noted that the huge payments made to IPPs over the years could have been used to expand the VRA’s generation capacity, enabling Ghana to produce and sell power more cheaply.

“If you do the math, we pay around US$70 million to IPPs every month — about US$840 million a year,” he explained. “Imagine if we had invested that money directly into building new VRA thermal plants. We could be generating more power locally and at a lower cost.”

He also raised concerns about tariff inconsistencies that tend to favour private producers over state-owned utilities.

“When it’s IPPs, we strictly enforce tariff collections. But when it comes to VRA, we’re more lenient,” he pointed out. “Why can’t we apply the same standards to our own institutions?”

Mr. Jinapor reaffirmed the government’s commitment to strengthening the energy sector through transparency, collaboration, and long-term planning, ensuring that Ghana’s power industry becomes both sustainable and affordable.