The Independent Power Producers (IPPs) have yet reminded Finance Minister, Ken Ofori-Atta, of their intention to cut power supply to the national grid from July 1, 2023.
According to the Chamber of Independent Power Producers, calls on the government to pay the IPPs an interim payment of 30% of the outstanding arrears of each IPP by June 20, 2023, has fallen on deaf ears. The IPPs revealed that it had indicated in letters that it needed to receive an interim payment of 30% of the outstanding arrears of each IPP by 20th June 2023.
“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.”
Independent Power Producers
Despite the letters sent, the IPPs in a statement noted that government has not fulfilled its end of the bargain. It explained that the IPPs has unfortunately not seen any “good faith indication or commitment” of such impending payment from ECG/Government as of June 21, 2023, despite the Electricity Company of Ghana’s recent collection efforts, as reported in the media, which yielded GHC3.1 billion.
Furthermore, the IPPs noted that its members are currently at a point where they are unable to persuade their creditors, contractors, and other key stakeholders to further defer payments owed them and to continue operations. To this end, it urged the government and the Electricity Company of Ghana and other stakeholders to treat the reminder with the urgency it deserves and take the steps necessary to obviate such a situation.
Impact of increment in tariff on businesses
Meanwhile, the Minority in Parliament has predicted some challenges for businesses in the coming days following the government’s deal with the International Monetary Fund (IMF), especially in relation to quarterly adjustments of utility tariffs.
According to the minority, the government will increase utility tariffs every three months without recourse to the Public Utilities Regulatory Commission (PURC), which will further worsen the high cost of doing business and aggravate the harsh economic conditions.
Addressing the media, Deputy Ranking Member on the Finance Committee of Parliament, Isaac Adongo, underscored the impact of such increases on Ghanaians in the coming days.
“Every three months, they will increase electricity and water tariffs without due regard to its impacts on individuals, households, and businesses and this will definitely impact badly in the cost of doing business and feed into the current debilitating inflation and suffering being experienced by Ghanaians. Now you go and buy electricity and when you get home, you are afraid to slot the card because the units on the card are not enough, and you will need to go back and buy to top up.”
Isaac Adongo
It will be recalled that the Finance Minister Ken Ofori-Atta on Sunday, June 18, indicated that a number of structural reforms are being undertaken with respect to the $ 3 billion International Monetary Fund (IMF) deal.
Addressing a press conference, Mr Ofori-Atta said the structural reform agenda is consistent with Government’s own Public Financial Management Strategy, to transition from Central Government to General Government operations.
This shift, he noted, is critical as it facilitates clear oversight over key state institutions including Metropolitan, Municipal and District Assemblies (MMDAs), State Owned Enterprises (SOEs) especially Cocobod and Electricity Company of Ghana ECG, and others in the energy sector- and other quasi-State Institutions, whose operations have a significant and direct fiscal impact on Ghana’s economy.
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