The Independent Power Producers (IPPs) have threatened to suspend power supply beginning July 1, 2023 if the government does not give them an interim payment of 30% of their outstanding arrears.
The IPPs agreed at an emergency meeting on Tuesday that if they do not receive payment, they will be unable to power the national grid beyond June 30.
In a letter to the Finance Minister, members of the IPP Chamber state that they are now unable to persuade their creditors, contractors, and other essential stakeholders to further withhold payment and maintain operations.
“We had indicated in our letters that IPPs needed to receive an interim payment of 30% of the outstanding arrears of each IPP by 20th June 2023. Unfortunately, we have not seen any good faith indication or commitment of such impending payment from ECG/Government as of today, June 21, 2023, despite the Electricity Company of Ghana’s recent collection efforts, as reported in the media, which yielded circa ¢3.1 billion, it added.
IPPs, or independent power producers, which control 50% of the country’s generation mix, have urged the government to resolve its debt to them as soon as possible.
According to the nine enterprises, the Electricity Company of Ghana (ECG) owed them around $1.4 billion in cedis as of May.
Because of the debt, the IPPs lacked working cash to finance inputs such as chemicals for cleaning water for the thermal generators and other supplies, many of which were priced in foreign currency, primarily the US dollar.
The IPGG owed banks, and some had to make repayments this month but had to pay a penalty for defaulting, claiming that the IPPs had been suffering in silence due to rising debts.
“We refer to our letters dated March 27, 2023 and May 25, 2023 with reference number IPGG/1/2023 and IPGG/2/2023 addressed to the Minister [Finance] by which the IPP Chamber stressed the urgent necessity for the government to prioritise payment of the outstanding arrears owed to members of the IPP Chamber to enable the IPPs to cover critical operational costs required to continue operations and pay overdue debt service”, the letter to the Finance Minister added.
It further urged the government, the Electricity Company of Ghana, and other stakeholders to regard this reminder with the seriousness it deserves and to take the necessary actions.