World Bank Urges Government to Review Power Purchase Agreements for Economic Recovery
The World Bank has called on the government to reassess certain Power Purchase Agreements (PPAs) as part of the International Monetary Fund (IMF) bailout aimed at revitalizing the struggling economy.
According to the bank, many of the PPAs signed between the government and Independent Power Producers (IPPs) are costly. Mr. Pierre Frank Laporte, the Country Director of the World Bank responsible for Ghana, Sierra Leone, and Liberia, highlighted that several of the country’s power generation agreements are not only expensive but also flawed.
During an interview on Accra-based Joy FM’s 6:00 am news on Friday, June 2, 2023, Mr. Laporte stressed the importance of reviewing these PPAs. He emphasized that Ghana is currently paying more for power generation than necessary due to the nature of these agreements.
“The fact is Ghana entered into some PPAs that were wrong. These types, in our view, were at the wrong rate and at the wrong prices,” he explained. “And today the country is being billed for many of these wrong PPAs.”
Mr. Laporte highlighted the need for the government to restructure certain contracts and initiate talks with IPPs to renegotiate these PPAs. He emphasized that this course of action is crucial to address the issue effectively.
The World Bank’s recommendation aligns with efforts to ensure a more cost-effective and sustainable energy sector in Ghana. By reviewing and revising these agreements, the government can make significant strides towards optimizing power generation and mitigating unnecessary financial burdens.
The government has already initiated discussions with IPPs regarding the renegotiation of certain PPAs, demonstrating its commitment to addressing this issue. By undertaking such measures, Ghana can lay the foundation for a more efficient and economically viable energy sector.
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