Ghana: Cenpower Waives $66Million In Government Debt, Agrees To Tariff Reduction

Independent power producer Cenpower Generation Company Ltd. has agreed to revised terms under its amended and restated power purchase agreement (PPA) with the Electricity Company of Ghana, following approval by Cabinet and Parliament.

The revised PPA includes a $66 million debt waiver on the nearly $400 million in accumulated debt owed by the Government of Ghana to Cenpower, as well as a reduction in the tariff charged for power supplied to the offtaker.

Under the revised agreement, Cenpower has also been granted a 10-year extension to its existing contract.

The agreement was announced at a ceremony marking the 10th anniversary of operations at Cenpower’s 375-megawatt Kpone Thermal Power Plant.

Cenpower Board Chairman Samuel Nana Brew-Butler said the company had accepted the discount as part of a compromise to help address the country’s power sector obligations.

He said the accumulated debt had reached about $400 million at one stage, but the company had agreed to waive $66 million of the amount owed.

“If you remember, I said at one stage, what was outstanding was about $400 million, but it’s our country, so that sacrifice had to be made,” Mr Brew-Butler said.

The concession comes alongside changes to the commercial relationship between Cenpower and the government.

“As a gesture, the government also decided to give us a 10-year extension of the PPA,” he said, adding that the arrangement also involves “a reduction in the tariff we are giving.”

The deal forms part of the government’s broader efforts to restructure debts owed to power producers and renegotiate existing agreements to ease the financial burden on the electricity sector.

Vice President Professor Naana Jane Opoku-Agyemang, who attended the anniversary ceremony as the Special Guest of Honour, praised Cenpower’s contribution to Ghana’s electricity supply over the past decade.

She also highlighted the company’s community initiatives around the Kpone plant, including efforts to tackle plastic pollution along the Sega Beach shoreline.

Cenpower has also undertaken waste management and biodiversity conservation education for pupils of Paul Methodist School.

“These are all worthwhile initiatives,” Prof. Opoku-Agyemang said.

She urged the company to remain mindful of the environmental and social impact of operating a major thermal power facility.

“I encourage Cenpower to maintain its relationship with the surrounding communities and continue to pay attention to the environmental and social consequences of its operations.”