Ghana’s Independent Power Producers (IPPs) are advocating for licensing under the Ghana Free Zones Act, a move they believe will enhance their competitiveness in the regional power market. This proposal seeks to enable IPPs to export surplus electricity efficiently while ensuring that local energy needs are met.
The current Free Zones Act requires companies to export at least 70% of their production, leaving only 30% for local use. This has raised concerns about its potential impact on domestic energy supply, particularly for IPPs whose operations are structured around contractual energy obligations.
Dr. Elikplim Kwabla Apetorgbor, CEO of the Chamber of Independent Power Producers of Ghana, explained in an interview with The High Street Journal that the existing framework does not align with how IPPs operate. He explained that IPPs contract for Contracted Annual Energy rather than generation capacity, making the 70/30 rule challenging to apply in their context.
To address this, Dr. Apetorgbor revealed that the Chamber is preparing to recommend a policy review to policymakers. “In my strategic operational plan, I intend to recommend to policymakers to consider a review of that section [of the Free Zones Act], allowing IPPs to meet their contractual energy obligations locally and export the rest,” he said.
He further explained that such a revision would motivate IPPs to invest in additional capacity, creating opportunities to generate surplus energy for export. Licensing under the Free Zones Act would also provide IPPs with tax and regulatory incentives, enabling them to lower costs and compete effectively in regional markets.
This proposal aligns with similar developments in Ghana’s energy sector. In August 2024, Nuclear Power Ghana (NPG) partnered with U.S.-based Regnum Technology Group to deploy a NuScale VOYGR-12 small modular reactor (SMR). The SMR project aims to create an industrial enclave powered by nuclear energy, supplying electricity to both local businesses within the enclave and regional markets.
The SMR project also seeks licensing under the Free Zones Act, similar to the IPPs’ proposal, to leverage export opportunities while maintaining local supply.
Both initiatives highlight the importance of adapting Free Zones regulations to address the unique operational realities of Ghana’s energy sector, balancing domestic supply with regional competitiveness.
Revising the Free Zones policy to better suit the needs of IPPs Dr.Apetorgbor noted that Ghana can strengthen its position as a key energy supplier in the region while ensuring reliable electricity for local consumers.
