Ghana’s independent power producers, which produce the majority of the country’s electricity, hinted on shutting down their plant due to outstanding debt of $1.4 billion as of June 30.

CIPDiB asked the Akufo-Addo-administration to prioritize the energy sector by paying the accumulated debt owed its members as soon as possible to guarantee a continuous supply of power.

Should PDS fail to respect the terms of the PPA and make payment to the IPPs members may shut down plants which would affect jobs and revenue.

The huge financial indebtedness of PDS towards the IPPs implies that the IPPs are saddled with huge debts to their creditors and suppliers and also challenged in paying employees’ salaries.

What is the impact on IPP

Ghana relies on private producers for nearly half of its peak demand of 2,700 megawatts. The 12-member group wants the government to share how it intends to repay its debt in a mid-year budget presentation on July 23. It should also include measures to enable the state-run Electricity Company of Ghana Ltd. to pay suppliers on time, the group said.

The debt continues “to accumulate, compelling the IPPs to contract costly loans to sustain their generations,” the Chamber of Independent Power Producers, Distributors and Bulk Consumers said in an emailed statement Tuesday.

In a statement signed by the Chief Executive Officer of (CIPDIB), Elikplim Kwabla Apetorgbor, The debt crisis if not addressed could escalate into IPPs shutting down their plants in the immediate term.

We caution that should PDS fail to respect the terms of the PPA and make payment to the IPPs within the 7 days; our members will be left with no choice than to shut down their plants as they cannot continue to be saddled with huge debts. This action although has huge implications for jobs – cannot be avoided

Mr. Apetorgbor also admonished MiDA to compel PDS to do things to ensure best business practices and respect the terms of the PPAs and ensure the nation derive the optimum benefit from the concession arrangement.

What could avert a Dumsor crisis shortly?

CIPDIB further wants to urge the government to not only make PDS pay its debts to the IPPs; but that PDS must also be made to pay interest on all overdue invoices which the IPPs could have profitably utilized.

“The budget should include measures to ensure that the shortfall in ECG’s revenues are addressed as and when they occur, to ensure that IPPs and others who supply products or services to ECG are paid on time. IPPs cannot be responsible for the Government’s subsidies and other obligations,”