If quick action is not done to settle a debt of $1.73 billion owing to the Independent Power Producers, Ghana could soon face a catastrophic power crisis (IPPs).
The government must make an interim payment equal to 30% of the existing debt by July 1, 2023, or the IPPs will shut down their facilities, according to a fresh ultimatum from the IPPs.
The IPPs contend that they won’t be able to support the national grid through June 30 if they don’t get paid within the next several days.
Elikplim Kwabla Apetorgbor, the chief executive officer of the Chamber of Independent Power Producers, Distributors, and Bulk Consumers (CIPDiB), stated their inability to persuade creditors, contractors, and other crucial stakeholders to further delay payments and maintain operations in an interview on the Citi Breakfast Show on Tuesday, June 27.
“In essence, we’re stating that we don’t have the funds to keep producing after June 30. That’s why we’re giving the Finance Ministry till March. Although we haven’t heard from them, we just lack the resources to continue providing services through June.
Mr Apetorgbor added that “all the IPPs are operating on borrowed funds and the critical part is our ability to pay our debt. The second quarter is about to end, so the six of us have no resources to continue to supply, so we are not going beyond June 30th. Mr Apetorgbor also stated that the IPPs have rejected any form of debt restructuring because they cannot explain to their lenders that Ghana’s economy is in shambles and are unable to repay their debt.
“We have sacrificed a lot for the economy, the debt in question is already debt we have borrowed from our lenders and we can’t explain to them that we can’t pay because Ghana’s economy is in shambles, they won’t listen.” Independent power producers play a significant role in Ghana’s energy sector, controlling 47 percent of the country’s total power generation mix and contributing 67 percent of Ghana’s thermal power. As of May 2021, the six enterprises collectively claim an outstanding debt of approximately $1.73 billion in cedis, with the debt dating back to January 2021. The IPPs highlight that this debt has hindered their access to working capital, preventing them from financing crucial inputs such as chemicals for water treatment in thermal generators and other supplies, many of which are priced in foreign currency, primarily the US dollar.
