Sunon Asogli Power (Ghana) Limited has reversed its decision to indefinitely shut down its plant and has instead suspended the shutdown for one week.
The company made this decision based on the intervention and assurance of the Minister of Finance and Minister of State.
In a statement released on Monday evening, the company stated that it has reached an agreement to receive an interim payment of $60 million in two installments. The first installment of $30 million is expected to be paid this week, while the second installment will be paid during the week of December 11, 2023.
The independent power producer initially announced the indefinite shutdown of its 560MW plant due to the government’s delay in fulfilling its financial obligations to the company.
In a letter addressed to the Electricity Company of Ghana (ECG), Sunon Asogli Power expressed regret over the suspension of operations, emphasizing the accumulating unpaid bills and unproductive efforts to resolve the issue. The company stated that these financial challenges have significantly impacted its operational capacity and rendered it unsustainable to continue without addressing the outstanding debts.
This development highlights an ongoing problem faced by Independent Power Producers (IPPs) in Ghana. The government’s debt to the IPPs was reported to have reached approximately $1.6 billion as of July 2023. The IPPs have been complaining about the government’s indebtedness for years, but previous threats to suspend operations have not yielded significant results.
The recent 1.52 percent reduction in electricity tariff announced by the Public Utilities Regulatory Commission (PURC) was deemed unacceptable by the IPPs, as it could further hinder the ECG’s ability to repay its debts. Dr. Elikplim Apetorgbor, the President of the IPPs, emphasized the fragile financial state of the IPPs and the need for a sustainable solution to ensure their continuity.
By Vincent Kubi