The Finance Minister, Ken Ofori-Atta reveals that, his ministry recognizes Cenpower’s conversion to gas as a significant step in helping regenerate Ghana’s energy sector.
In a release by the Ministry of Finance, Mr.Ken Ofori-Atta, said government welcomes the significant milestone and commitment from Cenpower.
His comments come on the back of Cenpower Generation Company Limited, switching its primary fuel from Light Crude Oil (LCO) to natural gas and also signing a Gas Supply Agreement (GSA), with the Ghana National Petroleum Corporation (GNPC), as gas operations are expected to begin by the end of this week.
In the release, he revealed that, in recent weeks, there has been increased momentum under the ESRP Consultation Process towards resolving some extremely challenging legacy issues inherited from the previous administration.
He then went on to encourage all other IPPs to engage constructively with the Government negotiating team to conclude negotiations as soon as possible.
“IPPs have a vested interest and a significant role to play in providing a stable energy supply as well as ensuring a fair, balanced and sustainable energy sector for the people of Ghana.
“As ever, this Government is committed to building a competitive and dynamic energy sector, where private investments can thrive and the interests of the Ghanaian people and businesses continue to flourish.”
The statement said that, the GSA is a key part of the proposal put forward by Government during negotiations with Cenpower and will deliver substantial cost savings, estimated at $3.0 billion over the remaining term of the Cenpower PPA.
The statement further revealed that, conversion to natural gas will have important environmental benefits, as emissions will be lowered and Ghana’s abundant natural gas resources effectively utilised for the benefit of the Ghanaians and the business community.
It added that, the move to natural gas will alleviate the considerable pressure on Government from its take-or-pay commitments with fuel suppliers, and allow for the substitution of imported fuels with locally available natural gas, thus positively impacting the capital account.
The statement further went on to say that, Cenpower is a major power producer in Ghana, providing approximately 10% of Ghana’s total electricity generation and this project is an excellent example of the public and private sectors working together in Ghana to attract private investment, while ensuring sustainable development.
According to the release, Ghana presently pays over US$500 million a year for unused electricity and most of the Power Purchase Agreements (PPA) are legacy agreements, entered into under the previous administration.
The statement further added that, government, in collaboration with the World Bank, established the Energy Sector Recovery Programme (ESRP), identifying the policies and actions needed for financial recovery in the energy sector over a five-year horizon (2019-2023) and as part of these reforms, Government is taking steps to institute competitive bidding for future additional capacity, so as to ensure that future tariffs are fair and in line with expected pricing benchmarks.