In order to discuss payment arrangements for a $60 million debt owed to Sunon Asogli Power (Ghana) Limited, an independent power producer, the management of the Electricity Company of Ghana (ECG) is scheduled to meet with the power producer today, December 8.
The government’s delay in fulfilling its financial commitments to power plants was the reason given by the power producer for shutting down on Monday, December 4. Nevertheless, it postponed its decision for a week after receiving confirmation from the government that the debt would be paid off.
It went out of business because it was complaining that the mounting debt had severely affected its ability to operate and that it was not financially viable to carry on.
Sunon Asogli only suspended its decision following the Minister of Finance and Minister of State’s assurance and wrote in an acknowledgement note that “Kindly confirm our understanding that we shall be paid an interim sum of $60 million in two tranches. The first tranche $30 million to be paid this week and the second tranche in the week of 11th December 2023.”
The methods for paying off the government’s debt will be the main topic of discussion at today’s meeting.
Over the years, Independent Power Producers (IPPs) have expressed dissatisfaction with the government’s debt to them. But nothing significant has come of the numerous attempts, including threats to halt operations.
According to reports, the government owed the IPPs approximately $1.6 billion as of July 2023.
The Public Utilities Regulatory Commission (PURC) recently announced a 1.52 percent reduction in the electricity tariff, which the IPPs have deemed unacceptable.
The IPPs contend that ECG’s efforts to restructure its debt will be impacted by the reduction. Dr. Elikplim Apetorgbor, President of the IPPs, has declared that ECG will have difficulty repaying its debt.
