IPPG warns Ghana of fiscal and financial risks in proposed 2,000MW Russia nuclear project

The International Perspective for Policy & Governance (IPPG) has called on the government to provide greater transparency on the financing arrangements for the proposed 2,000-megawatt nuclear power project being discussed between Ghana and Russia.

The policy organisation says the scale and financial implications of the proposed project require careful scrutiny before Ghana makes any major commitment, particularly regarding the obligations of both countries, the allocation of risks and the possibility of government-backed guarantees.

In a statement, IPPG emphasised the need for “a clear financing framework, appropriate technology selection, and demonstrable institutional readiness before major project commitments are undertaken.”

It said the proposed project must be assessed beyond its installed generation capacity, taking into consideration its economic viability, fiscal implications and consistency with Ghana’s long-term electricity demand.

“A commitment of this magnitude must be assessed not merely in terms of installed generation capacity, but against its economic viability, fiscal implications, and consistency with Ghana’s long-term electricity demand and energy planning priorities,” the organisation stated.

IPPG said the financing structure must clearly establish the respective responsibilities of the Ghanaian and Russian parties, including who would bear construction and operational risks.

It also wants clarity on whether the arrangement would involve sovereign guarantees or other financial commitments by the government.

“Of particular importance is the financing structure that would underpin the proposed project, including the respective obligations of the Ghanaian and Russian parties, the allocation of construction and operational risks, and the extent of any sovereign guarantees or other government-backed financial commitments,” it said.

The organisation warned that the financial arrangements could have far-reaching implications for Ghana’s economy.

“Given the capital-intensive nature of a 2000 MW nuclear power development, these arrangements will have significant implications for Ghana’s public finances, electricity tariffs, and long-term fiscal exposure.”

Although IPPG acknowledged the potential of nuclear energy to diversify Ghana’s electricity generation mix and strengthen long-term energy security, it maintained that the government must ensure the project does not create disproportionate financial liabilities.

The organisation said the strategic value of the proposed partnership would ultimately depend on its ability to deliver reliable and affordable electricity.

It is therefore calling on the government to engage relevant stakeholders and develop a comprehensive framework outlining the status and scope of the proposed agreement, financing and risk-sharing arrangements, technology selection process and anticipated implementation pathway.

“Accordingly, IPPG calls on the GoG to engage relevant stakeholders to develop a comprehensive framework that clearly outlines the status and scope of the proposed agreement, the financing and risk-sharing arrangements, the technology selection process, and the anticipated implementation pathway.”

The call follows an announcement by Foreign Affairs Minister Samuel Okudzeto Ablakwa on October 31, after President John Dramani Mahama’s engagement with Russian President Vladimir Putin at the Russia-Africa Summit.