Energy Expert, Yussif Sulemana, has attributed the challenges within Ghana’s energy sector and its attendant power distribution to phenomenal inefficiencies within the sector.
According to him, the energy sector has been blighted by so many challenges, leading to its current state with the Independent Power Producers (IPPs) threatening to shut down their operations. He revealed that government must necessarily plug the loopholes within the sector to avert further crisis.
Mr Sulemana stated that unless that is carried out, there’s no amount of money that government can inject into the system which will ensure optimal performance.
“First of all, I think our major issue within this power distribution sector is phenomenal inefficiencies. Even it’s signed ‘Take or Pay’ and you are phenomenally efficient, it will be like ‘Take and Pay’, especially if you have your plants running continuously and you are able to run your plant efficiently… Our major problem within this value streams is phenomenal inefficiencies…”
Yussif Sulemana
Furthermore, Mr Sulemana stated that some of the excess charges government incurred were avoidable and still high, although nothing can be done. He noted that the phenomenal inefficiencies equally emanates from unwarranted interference by political actors.
“Yes, it’s not that we didn’t see this coming, it is true debt has always been there, but the difference between what we have been talking about and this time is the fact that we are almost facing what’s inescapable if we don’t do something right.”
Yussif Sulemana
Government urged to immediately engage IPPs
The energy expert explained that with the quantum of power the IPPs are contributing, if government does not engage them thoroughly as the July 1 deadline beckons, it will portend disaster. He noted that at this point, government has no option than to engage.
“… We are behaving as if we have options. We don’t have credible options. If we had actually diversified our generation portfolio, we can have an alternative to IPPs. We don’t have alternatives so where is our bargaining power? Going forward, we don’t have to keep blaming [others], we have to come together and agree on something… If it continues like this and at the end of the day [IPPs] stay course on their promise, we are going to have ourselves to blame and I think the government will take the blame for everything because it is the duty of the government to resolve all these issues.”
Yussif Sulemana
Moreover, Mr Sulemana stated that the blame cannot be wholly placed on the ECG for failing to recover enough money. He explained that government can effectively handle the problem by ensuring some independence among institutions to deliver on their mandate.
“While politicians are supposed to create that enabling environment for businesses to thrive, they want to be in the forefront in doing this business… If we are able to make our institution independent and robust, they will be able to pay these debts [and] we wouldn’t run into this.”
Yussif Sulemana
On his part, a member of mines and energy committee in parliament, Edward Bawa, revealed that the problem Ghana has on its hands is that of independent power producers who generate power, sell the power and are not paid. He stated that most of these IPPs constructed these power plants using debt, therefore they need to service their loans.
As such, he indicated that the moment IPPs do not have cash flow, the servicing of loans becomes a problem and lenders will be on their neck.
“I think the Chamber has given government sufficient time to begin a conversation. Indeed, in all this period the media was talking about it, it was only on the 27th, 28th and 29th that government scheduled to meet the Independent Power Producers individually… That tells you the seriousness with which government has placed on this particular problem. It must be stated clearly that GHC1.73 billion as of May is consumption bill… It means that it is power we had consumed and have not paid.”
Edward Bawa
Mr Bawa highlighted that government’s suggestion of implementing a haircut and postponing payment to IPPs over a period is not tenable and must find means of making prompt payment.
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