Independent Power Producers (IPPs) have been asked by former President John Dramani Mahama to rethink their decision to shut down their plants on July 1 due to the government’s outstanding debt of $1.73 billion.
This decision was made because of the IPPs’ desire to protect their own financial interests.
In a statement that was published on Facebook on the 30th of June, the former President of Ghana emphasised that such a decision would have grave repercussions for Ghana’s economy and would negatively affect the lives of a large number of Ghanaian families.
Mahama Begs IPPs
“As a concerned citizen, I would like to make a petition to the Chamber of Independent Power Producers (IPPs) to reconsider their decision to shut down their facilities starting on July 1, 2023. I would appreciate your consideration in this matter.
If the independent power producers (IPPs), which are responsible for about half of the total power generation in the country and for more than two-thirds of Ghana’s thermal power, go through with this plan, it will have a terrible impact on Ghana’s economy and will significantly affect the lives and livelihoods of countless families in Ghana.
Additionally, the candidate for leadership of the NDC made an appeal to the government, urging them to take quick action and begin conversations with the IPPs in order to find a long-term solution to the approaching power crisis.
In addition to this, he stated that “it is imperative that these discussions begin without delay and be given the highest priority.”
On Thursday, June 29, the Chamber of Independent Power Producers issued an order to its members instructing them to reduce their supply to the national grid beginning on July 1.
Companies such as Sunon Asogli, Cenpower, Karpowership, AKSA, Twin City Energy, and CENIT are included among the Chamber’s membership.
Independent power producers play an important part in Ghana’s energy sector, controlling 47 percent of the country’s overall power generation mix and supplying 67 percent of Ghana’s thermal power. This percentage represents a major portion of the country’s total power generation.
As of the beginning of May 2021, the cumulative outstanding debt that the six companies claim to be responsible for amounts to around 1.73 billion cedis, and the debt was incurred in January 2021.
The independent power producers note that their inability to access working capital as a result of their debt has prevented them from funding essential inputs such as chemicals used for water treatment in thermal generators and other supplies. Many of these inputs are priced in a foreign currency, most notably the United States dollar.
The Chief Executive Officer of the Chamber of Independent Power Producers, Distributors, and Bulk Consumers (CIPDiB), Elikplim Kwabla Apetorgbor, stated that they were unable to persuade creditors, contractors, and other critical stakeholders to further delay payments and keep operations going.
We are essentially stating that we do not have the resources necessary to continue generation beyond the 30th of June, and we are giving them [the Finance Ministry] the month of March as an extension. We didn’t hear from them, but the fact is that beyond June, we just won’t be able to continue to supply because we don’t have the resources.