A power crisis of magnitude proportions stares Ghanaians in the face if the government fails to take urgent action to honour its debt obligations of $1.73 billion owed to Independent Power Producers (IPPs).
The IPPs have recently issued a renewed ultimatum, warning that they will commence a shutdown of their power plants from Saturday, July 1, 2023, unless the government provides an interim payment of 30% of the outstanding debt.
According to the IPPs, failure to receive payment in the next few days will result in an inability to sustain the national power grid beyond Friday, June 30.
Elikplim Kwabla Apetorgbor, the CEO of the Chamber of Independent Power Producers, Distributors, and Bulk Consumers (CIPDiB), expressed their inability to convince creditors, contractors, and other stakeholders to further postpone payments and maintain operations.
Speaking to Accra-based Citi News, Mr Apetorgbor emphasized that all the IPPs are currently operating on borrowed funds, and without the necessary resources, they cannot continue supplying electricity beyond the specified date.
“Basically we are saying that we lack the resources to continue generation beyond 30th June and we are giving them [Finance Ministry] up to March. We didn’t hear from them but the fact is beyond June we just don’t have the resource to continue to supply.”
He 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.”
“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.”
Furthermore, Mr Apetorgbor noted that debt restructuring has been rejected by the IPPs because they are unable to justify to their lenders that Ghana’s economy is in a dire state, making debt repayment unfeasible.
Independent power producers play a significant role in Ghana’s energy sector, accounting for 47 per cent of the country’s total power generation mix and contributing 67 per cent of its thermal power production. As of May 2021, the six IPPs collectively have an outstanding debt of approximately $1.73 billion in cedis, with the debt dating back to January 2021.
The IPPs emphasize that this debt has impeded their access to working capital, hampering their ability to finance critical inputs like chemicals for water treatment in thermal generators, as well as other supplies that are primarily priced in foreign currency, notably the US dollar.
