PUWU urges government to renegotiate IPP contracts to curb revenue losses

The Public Utility Workers Union (PUWU) is urging the government to renegotiate contracts with Independent Power Producers (IPPs). They believe current pricing arrangements cause financial inefficiencies in Ghana’s energy sector.

In an interview with Citi FM on May 15, PUWU General Secretary Timothy Nyame expressed his concerns. He noted that the cost implications of IPP contracts are often overlooked. Nyame believes these contracts lead to significant revenue loss.

He asked, “Has the government taken the time to renegotiate IPP contracts?” He pointed out that discussions usually focus on utility tariffs and fuel supply. However, little attention is given to the high costs of electricity from IPPs compared to other African countries.

Nyame emphasized that IPP pricing contributes to revenue leakages. He stated, “Nobody is speaking about that. Nobody sees that IPPs should be renegotiated.”

He also mentioned how exchange rate fluctuations negatively affect power pricing. Nyame urged for a shift to contracts in Ghana cedis. This change would better align with local economic conditions.

“Looking at pricing across Africa shows how much some IPPs charge compared to Ghana,” he said. He added that changing pricing to Ghana cedis is not being considered enough.