Ken Ofori-Atta
In a last-minute effort to prevent a major power crisis, the Ghanaian government has made a partial payment to the Independent Power Producers (IPPs) after an emergency meeting held on Friday, June 30, 2023.
The payment came in response to the IPPs’ demand for a 30 percent interim payment of the outstanding US$1.7 billion debt owed to them by the Electricity Company of Ghana (ECG).
The IPPs, which account for approximately 50 percent of the power generated on the national grid, had threatened to shut down their power plants effective July 1, 2023, due to the government’s failure to address the arrears owed to them.
However, following the government’s partial payment, the IPPs have decided to rescind their decision and continue operations.
The Chamber of Independent Power Producers (IPPs), representing well-known companies such as Sunon Asogli, Cenpower, Karpowership, AKSA, Twin City Energy, and CENIT, had issued a directive to its members to suspend power supply to the national grid starting July 1.
This move was intended to put pressure on the government to address the outstanding arrears and resolve the debt crisis.
The IPPs argue that the unpaid debt, which has accumulated since January 2021 and amounts to approximately $1.73 billion, has severely affected their ability to access working capital.
This, in turn, has hindered their operations and prevented them from financing necessary supplies, particularly those priced in foreign currencies.
Elikplim Kwabla Apetorgbor, CEO of the Chamber of Independent Power Producers, Distributors, and Bulk Consumers (CIPDiB), expressed concerns about the lack of resources to continue power generation beyond June 30.
Despite their attempts to negotiate with creditors and stakeholders, the IPPs reached a point where they could not sustain power supply without receiving payment for their services.
The potential power crisis caused by the suspension of power supply by the IPPs could have had significant consequences for Ghana’s energy sector and the country as a whole.
It was imperative for the government to address the outstanding arrears and find a sustainable solution to ensure uninterrupted electricity supply for businesses and households.
Immediate action is necessary to resolve the arrears dispute and prevent further disruptions to Ghana’s power supply.
The government has been urged to prioritize this issue to safeguard the nation’s energy needs.
Time is running out, and it is crucial to work towards a long-term resolution that benefits all parties involved.
By Vincent Kubi