Ghana to spend $1 billion in restructuring power deals

Ghana’s Finance Minister has indicated that the government intends to use $1billion of the Eurobonds it sold last week to restructure the country’s obligations to independent power producers.

Finance Minister, Ken Ofori-Atta

Ghana is holding talks to re-negotiate supply deals with the power companies known as IPPs. Currently, the agreement with IPPs is a take-or-pay which means the government is billed even for unused electricity.

“We are going to put about $1 billion aside from the proceeds of the Eurobond to look at how we resolve those IPP issues,” Ofori-Atta said in a broadcast on Joy FM. “We are in the middle of negotiating this take-or-pay which is just egregious to the country and we came out boldly to say that we are not going to continue with this type of unbalanced contracts for our country anymore.”

Ghana sold sub-Saharan Africa’s longest-ever Eurobond as part of a $3 billion deal that was almost five times oversubscribed last week. The country’s power capacity is almost double the country’s peak demand needs.

Ghana’s electricity utility has to pay independent producers about $450 million every year for energy that it doesn’t consume.

The Finance Minister said Ghana will spend another $1 billion of the Eurobond proceeds to retire more expensive debts to reduce interest costs, while the rest will go toward infrastructure projects.

Ghanaian government pays its $1billion legacy debt owed Bulk Oil Distributors

The Ghanaian government has finished paying off all legacy debts owed to the Chamber of Bulk Oil Distributor (CBOD).

This was contained in a statement issued by the Chief Executive Officer (CEO) of the Chamber, Senyo Hosi.

The statement said the government made payment to the tune of $1 billion as of January 13, 2020.

The debt was accrued for four years; between July 2011 and July 2015. According to the bulk oil distributors the debt was estimated at $1.43 billion.

But the BDCs to slash $432 million, leaving about $1 billion to be cleared via an agreed payment plan with the government.

Our newsletter gives you access to a curated selection of the most important stories daily.

Welcome to the Pulse Community! We will now be sending you a daily newsletter on news, entertainment and more. Also join us across all of our other channels - we love to be connected!

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Africa’s richest man Aliko Dangote poised to overtake another Russian billionaire Vladimir Lisin on Bloomberg billionaires list

Africa’s richest man Aliko Dangote poised to overtake another Russian billionaire Vladimir Lisin on Bloomberg billionaires list

Pulse Influencer Awards 2022 is Live!

Dance

Mzee Kibor's will made public, revealing how vast wealth and millions will be distributed

Mzee Kibor's will made public, revealing how vast wealth and millions will be distributed

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Mathias Pogba brands Paul Pogba 'a so-called Muslim steeped in witchcraft' amid fetish claims about Kylian Mbappe

Mathias Pogba brands Paul Pogba 'a so-called Muslim steeped in witchcraft' amid fetish claims about Kylian Mbappe

Referee behind chaos at AFCON was rushed to hospital after match

Referee behind chaos at AFCON was rushed to hospital after match

Ne-Yo speaks out after wife Crystal announced end of their 8-year marriage

Ne-Yo speaks out after wife Crystal announced end of their 8-year marriage

Eddie Butita speaks on his fallout with Miss Mandi, offers her a job

Eddie Butita speaks on his fallout with Miss Mandi, offers her a job