Ghana’s independent power producers threaten to shut plants due to government mounting debt currently at $1.4 billion as of June 30, 2020. In a press release, the chamber of independent power producers, distributors, and large consumers demanded that the government include the debt payment plan in the mid-annual budget scheduled for July 23.
In addition, the IPPs want the Ghanaian government to reveal plans on the debt repayment and compel timely payment to suppliers by the state-run Electricity Company of Ghana (ECG). In this case, the IPPs urged the Ghanaian authorities to include measures that will ensure shortfalls in ECG revenues are addressed as and when they occur.
Bloomberg quoted the spokesperson in the Ministry of Finance who said that the government remained committed to its power sector reforms and is engage in bilateral negotiations.
The chamber explained that 1.5 percent of the debt represents unsettled legacy debt dating from 2016. 78 percent represent cumulative invoices from the time when the power distributions services took over power distribution in Ghana to date. The remaining 20.5 percent represents default claims.
The power producers worry that the mounting debt has forced them to contract costly loans to sustain their generations. IPPs provide almost 50 percent of Ghana’s power whose peak demand stands at 2700MW.