Booking.com

Government settles over 50% power debt owed IPPs

Ghana Ghana Business News

The Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDiB), has revealed that government has settled a little over 50% of the overdue debt owed them.

According to them, this leaves the current indebtedness of the government to the IPPs at about $750 million.

This comes barely two months after the Chamber threaten to withdraw its services over unpaid USD$1.5 billion power sales debt. The component of the power sector debt within the energy sector which was accrued by the end of 2016 involved both state-owned corporations and Independent Power Producers.

Speaking to Citi Business News, Chief Executive of the Chamber, Elikplim Apetorgbor described the move as a sign of good faith shown by government.

ADVERTISEMENT

He however, added that it wants government to do more in settling its debts owed IPPs, as the debt keeps growing because the nation’s power distribution company – Electricity Company of Ghana (ECG) – is unable to collect all the money for the energy it sells.

“Survival of ECG is important to us, we have every reason to be worried when ECG is not performing to the desired expectation. As a chamber we have offered ourselves to government to bring our expertise and knowledge to bear in fixing the power sector. As we speak ECG is always struggling to meet 100% of its expected revenue largely due to over 24% loses. It will interest you to know that ECGs collection rate is only a little above 86%, where is the rest 14 %, what are they doing about it?” he said.

“As IPP we see ourselves as development partners not at war with any government or not at war with any institution. IPPs in Ghana remain the most competitive in the sub region. We are doing averagely eleven cents per kilowatt hour. And as a Chamber and as an objective we have challenged ourselves to competition to do better than this. The 12 billion payment is not a gift. It’s a legitimate payment. It is actually an overdue payment and it is in respect of services that we have pre-financed and provided just to keep the lights on for the good people of Ghana,” he added.

IPPs threatened to withdraw services prior to December 2020 elections

In November 2020, the Independent Power Producers and Bulk Distributors, threatened to withdraw their services.

This was after they sent a letter to the Ghana Grid Company Limited.

The letter to GRIDCo said the action has become necessary as it demands ECG and government to settle at least 80% of its indebtedness worth $1 billion, in a matter of urgency.

Citi news


Leave a Reply