Ghana’s Public Utility Workers Union (PUWU) is calling on the government to urgently revisit and renegotiate its contracts with Independent Power Producers (IPPs), warning that current pricing terms are contributing to persistent financial inefficiencies in the country’s energy sector.
Speaking in an interview, PUWU General Secretary Timothy Nyame criticized the government’s inaction on contract reform, saying the elevated cost of electricity from IPPs has become a major source of revenue leakage.
“There are certain things that we are also raising about the pricing of IPPs, has the government taken the pain to renegotiate the IPP contract with them?” Nyame said.
The union argues that while policy discussions often focus on consumer tariffs and fuel supply constraints, the underlying cost of power generated by private producers has received insufficient scrutiny. Nyame noted that Ghana’s IPP pricing models remain well above regional averages.
“These are some of the things that we are mentioning, that the pricing of the IPP is part of the leakages that they have to plug. Nobody is speaking about that. Nobody sees that IPPs should be renegotiated,” he said.
He highlighted the volatility of foreign exchange markets as a structural risk, urging the government to consider transitioning IPP contracts into Ghana cedis to better align with domestic economic conditions.
“Looking at the pricing across Africa, how much some of the IPPs are charging compared with Ghana. Also, changing the pricing into Ghana cedi. We are not looking at that,” he said.
Ghana’s energy sector has been under growing fiscal pressure in recent years, with rising debts owed to IPPs and recurring shortfalls at the state-owned Electricity Company of Ghana.
On the back of mounting pressures, the sector minister, Mr. John Jinapor stated during a meeting with the Parliamentary Select Committee on Energy and power sector stakeholders on May 15, 2025, that all MDAs are supposed to pay for their electricity bills. He also disclosed an urgent need for GH₵1.1 billion to purchase liquid fuel for power generation, warning that current reserves can only last a few more days.
