Mahama pleads with IPPs their decision over $1.73 billion debt

Former President John Dramani Mahama has urged the Independent Power Producers (IPPs) to reconsider their decision to shut down their plants on July 1 due to the government’s outstanding debt of $1.73 billion.

In a Facebook post on June 30, the former President emphasized that such a move would have severe consequences for Ghana’s economy and negatively impact the lives of numerous Ghanaian families.

“As a concerned citizen, I would like to make a plea to the Chamber of Independent Power Producers (IPPs) to reconsider their decision to shut down their plants effective July 1, 2023.

“If the IPPs, who account for almost half of the country’s total power generation and over two-thirds of Ghana’s thermal power, go through with this plan, it will have a disastrous impact on Ghana’s economy and negatively affect the lives and livelihoods of countless Ghanaian families.”

The NDC flagbearer also called on the government to immediately take action and initiate discussions with the IPPs to find a sustainable solution to the impending power crisis.

He added that “it is imperative that these discussions begin without delay and be given the highest priority.”

The Chamber of Independent Power Producers on Thursday, June 29 directed its members to cut supply to the national grid from July 1.

Members of the Chamber include Sunon Asogli, Cenpower, Karpowership, AKSA, Twin City Energy and CENIT.

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.

Elikplim Kwabla Apetorgbor, the Chief Executive Officer of the Chamber of Independent Power Producers, Distributors, and Bulk Consumers (CIPDiB), expressed their inability to convince creditors, contractors, and other essential stakeholders to further delay payments and maintain operations.

“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.”