Independent Power Producers in Ghana have said if the government fails to pay some $1.4 billion owed them “as soon as possible”, they cannot promise uninterrupted power supply.
The Chief Executive Officer of the Chamber of Independent Power Producers, Power Distribution Companies and Bulk Consumers, Ghana (CIPBiD), Mr Elikplim K. Apetorgbor, told Kwabena Bobie Ansah on The Citizen Show on Saturday, 25 July 2020 he hopes the government makes provisions for the payment soon enough.
Ahead of Thursday’s mid-year budget review presented to Parliament by Finance Minister Ken Ofori-Atta, CIPBiD issued a statement in which it said the “government’s cumulative indebtedness to them is compelling them to contract costly loans to sustain their generations”, and reminded the government to capture its indebtedness to the Chamber in the mid-year budget.
The statement added: “This situation is grim and there is a real danger of IPPs shutting their plants if the situation is not resolved in the immediate term.”
The Chamber, thus, urged the government to include measures to ensure that the shortfalls in the Electricity Company of Ghana’s (ECG) revenues are addressed as and when they occur, to ensure that IPPs and others who supply products or services to the ECG were paid on time.
It warned that the IPPs cannot be responsible for the government’s subsidies and other obligations.
Mr Apetorgbor said although the debt issue “has not been specifically provided in the mid-year budget”, he “listened to an interview where the deputy finance minister admitted that they have a provision for us, so, we are standing by to hear from them”.
He said “continuous supply of power can only be guaranteed by the government paying us”, adding: “If it is not paid, we cannot guarantee continuous supply and it is not something like a threat to pay but that is the real situation”.
Power plants, he noted, “are run by money and if the money is not there, what can we do?”
“We have borrowed and borrowed and every day, we receive threatening letters from our lenders”, he bemoaned.
According to him, the Chamber expects the debt to be cleared in “the immediate term”.
Proffering solutions to the debt-riddled power sector, Mr Apetorgbor told Bobie Ansah that: “I’m personally worried about the development”, explaining: “Sincerely speaking, this debt position is totally avoidable”.
The government, he suggested, “should take pragmatic steps to run the sector as a serious business”.
In his view, “continuous influence and interference from politicians will continue to treat the sector this way”.
“If you look at the ECOWAS sub-region, it’s only in Ghana that you see this kind of case”, he noted, pointing out that in neighbouring Togo and Benin, for instance, the suppliers “do about 98 per cent collection of revenue from power sales as against about 86 per cent of our ECG”.
“It means our distribution utility is not doing fair enough compared to what is happening in the sub-region. Meanwhile, in Ghana, we can boast of an effective grid or even distribution system”, he said.
CIPBiD’s Board of Directors is chaired by Togbe Afede XIV, President of the National House of Chiefs.
Its other Board members include Kwame Pianim, Finance and Business Consultant and former Chairman of the Public Utilities and Regulatory Commission (PURC); Samuel Nana Brew- Butler, Director, Cenpower Generations; Qun Yang, Chairman, Sunon Asogli Power Ghana Limited; Reginald France, Board Member, Early Power Limited; and Daniel Acheampong, Chief Executive Officer, Volta Aluminium Company (Valco).
The remaining are Bhavesh Kumar, Managing Director, B5 Plus Limited; Murat Captug, Country Director, Aksa Energy; Kelvin Wu, Managing Director, BXC; Volkan Buyukbicer, Country Manager, Karpowership; Victor Noja, CEO, CENIT Power; Norbert Anku, Managing Director, Enclave Power and David Kwadzo Ametefe, former Commissioner, Public Utilities and Regulatory Commission (PURC).