Impact Summary: Secret electricity contracts between governments and energy producers stifle clean energy deployment and harm lives, businesses, and economies. Our March 2021 case study on Ghana’s power purchase agreements (PPAs) showed how non-disclosure was draining public funds, increasing debt, and failing to deliver promised electricity — prompting the Hub to rank Ghana among the lowest group of ‘non transparent’ countries in PPA Watch. We recommended publishing contracts or, as an initial step, a simple 10-point disclosure tool to make basic information in PPAs public.
While negotiating debt relief, Ghana’s utility regulator (led by a former Hub Fellow) launched a public register of power purchase agreements (PPAs) to share information on all 14 of the country’s active electricity contracts. The public details match our proposed 10-points and the move upgraded Ghana’s score on PPA Watch to “partly transparent.”
The public registry is a huge first step towards contract transparency that will reduce government and investor risk, attract higher quality investors, lower consumer prices, and speed up deployment of clean energy. It also serves as a practical model for other countries to follow.
Why It Matters
Secret electricity contracts in Ghana have increased electricity prices, slowed deployment of clean energy, stifled competition, and added to the country’s unsustainable debt. In 2018-2019, Ghana spent nearly $1 billion for power it didn’t use. A commitment to disclose future power purchase agreements (PPAs) could prevent future debt distress — while securing better prices for consumers. The new public PPA register, launched by Ghana’s utility regulator, shares information on all 14 of the country’s active electricity contracts, covering both renewable and non-renewable power projects. This is a first step toward a more transparent market that can build the energy system Ghana needs to meet its economic and industrial goals. And the country has historically been a bellwether — where Ghana goes, many other countries may soon follow.
What We Did
- Found and cultivated the right person. In 2019, we co-hosted a policy discussion on Ghana’s long-term electricity plans with the Institute of Economic Affairs (IEA) Ghana. There we met the impressive energy economist Ishmael Ackah from Ghana’s Energy Commission and recruited him as a joint fellow at the Hub and IEA.
- Produced a data-rich, policy-relevant case study about Ghana’s power purchase agreements. Ackah and colleagues at the Hub and IEA developed a case study of Ghana’s power contracts, showing how non-disclosure was draining public funds, increasing debt, and failing to deliver promised electricity. The case study proposed publishing contracts or, in the interim, using a sample terms sheet disclosing award process, signatories, type of technology, price, and other basic information.
- Crafted timely, politically-relevant analysis and recommendations. The Hub produced a steady beat of analysis on Ghana’s power sector including leading energy priorities and the top supply challenges. We also linked ongoing debt restructuring negotiations to opaque power contracting with The Other Hidden Debt: How Power Contract Transparency Can Prevent Future Debt Risk on the IMF’s Public Financial Management site.
- Built PPA Watch, scoring countries on power contract transparency. PPA Watch incorporates details from the Ghana case study and ranks a sample of countries on the transparency of contracts between producers and utilities with any public sector guarantee using a 10-point rubric.
- Benefited from fortunate circumstances. In 2022, Ishmael Ackah was promoted to executive secretary of the Public Utilities Regulatory Commission (PURC) in Ghana, where he could lead efforts to increase power purchase agreement transparency.
Big win: Ghana Power Utility Regulator Launches Public Register of PPAs (and the details look a lot like what we proposed).
Soon after Ishmael Ackah took over leadership of PURC, they launched a public PPA register to share information on all 14 of Ghana’s active electricity contracts. The registry’s details closely align with those proposed in our case study and on PPA Watch. While Ackah’s promotion was clearly outside our control, this is a prime example of our insider-outsider strategy. We aim to build and cultivate a global community of rising analysts and policy entrepreneurs committed to driving practical, politically-relevant changes in their own energy systems and institutions.
The PPA registry is a huge first step for power sector transparency in Ghana and could help other countries follow suit. Next steps could include:
- Ghana’s parliament uses the registry to increase oversight and potentially pass legislation requiring public disclosure for any PPA with a public interest.
- The Ministry of Energy commits (or directs the regulator) to publish all future electricity contracts (lightly redacted where necessary) within one year of financial close.
- The Ministry of Finance insists any future PPA with a direct or indirect sovereign guarantee be publicly disclosed like any other loan.
These steps should help Ghana’s power market function more efficiently, reduce debt risk, and enable the country to build the power system it needs for a growing economy.
Bottom line impact → The Hub helped inspire and shape Ghana’s game-changing PPA registry. This first-of-its-kind policy innovation moves the country towards a more transparent market capable of powering its economic and industrial goals, and establishes Ghana as a leader and model for other countries.
- Ishmael Ackah, former Fellow at the Energy for Growth Hub and IEA Ghana, who became head of the utility regulator.
- Charles Mensa, Chairman of the IEA Ghana and Hub Advisor, and IEA Director of Research John Kwakye.
- The Hub’s PPA Transparency Director Rushaiya Ibrahim-Tanko and Co-Director Mohamed Rali Badissy who direct the project’s analysis and advocacy.
- Co-authors of the Ghana case study were Ackah, Kwakye, along with Katie Auth and Todd Moss.
- Charles Kenny, Senior Fellow at CGD and Hub Advisor who co-authored the PPA white paper with Badissy and Moss.
Learn more about our PPA transparency work.
- What Ghana’s Game-Changing PPA Register Means for Power Sector Transparency
- 7 Post-Election Priorities for Ghana’s Energy Sector
- The Other Hidden Debt: How Power Contract Transparency Can Prevent Future Debt Risk
- The Latest Power Supply Challenges in Ghana
- A Case Study of Ghana’s Power Purchase Agreements
- PPA in 2 Minutes (video)