Pay fuel suppliers regularly to ensure continuous power supply – IPPs to government

The Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDIB–Ghana) has questioned government’s commitment to regularly pay its members to ensure a continuous supply of power in the country.

This comes days after Government announced an amended Power Purchase Agreement with CENIT Energy Limited, a Ghanaian independent power producer.

According to the Chamber, government owes them about USD$1.5 billion.

Speaking to Citi Business News, CEO of the Chamber, Elikplim Kwablah Apetorgbor, said though they have welcomed the agreement, government must put in place measures to avoid plunging the country into an energy crisis.

“At present, ECG is heavily indebted to the entire power sector, even to the state institutions like VRA, GRIDCo. Likewise, they owe the IPP’s to a tune of about $1.5 billion. Now under this, government is going to add further responsibilities to it. What that means is that ECG must ensure that the fuel suppliers are regularly paid to guarantee the supply of power. The tolling agreement is not new to our power market so if ECG will not live up to expectation, it means we are going back to those days where fuel supply was the cause of irregular power supply. The bottom line is that there should be regularly payment for the supplier to guarantee continuous generation of power,” he said.

Meanwhile, the Chamber has warned of a shutdown of their thermal plants by the end of September 2020, if government fails to pay the USD$1.5 billion debt owed them.

“For us, we are open to this tolling arrangement if Ghana wants to carry the responsibility of the fuel supply. It’s a risk that we are transferring to them.  So if government wants to manage it, we are comfortable because we don’t need to go and borrow money to pay for gas. But we are saying that if government cannot pay us, we are going to shut down because we’ve had enough patience and tolerance. Our creditors are running after us, and we don’t have a choice,” added.

IPPs disappointed over silence on debt in Mid-year budget

Earlier this year, the Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDIB–Ghana), expressed disappointment over government’s failure to address the debt of about USD$1.5 billion owed them in the Mid-year budget.

According to them, although the power sector has many challenges, the Finance Minister, Ken Ofori-Atta, during the reading of the Mid-year budget review on Thursday, 23 July 2020, did not speak about how to address the chronic financial challenges and revenue shortfalls.

—citibusiness