Dumsor looms as IPPs threaten to shut down plants over non payments

Independent Power Producers (IPPs) which supply half of the 2,700 MW produced in Ghana, say they will be forced to shut down their plants if the government does not pay the $ 1.4 billion owed them.

The power producers are bemoaning lack of funds to meet their operating costs of the power plants. Dumsor may soon happen, they said.

The independent power producers (IPP) are therefore threatening to cut off the supply of electricity to the national grid due to default by the state. The latter owed them $ 1.4 billion as of June 30, 2020.

A statement issued by the Chamber of Independent Power Producers, Distributors and Large Consumers said debt continues to “accumulate, forcing independent producers to take out expensive loans to continue financing electricity production.” Before continuing “This situation is grim and there is a real risk that independent producers will shut down their power plants if the situation is not resolved immediately”.

It is worthy to note that, nearly 50% of the Ghana’s maximum production, which amounts to 2,700 MW are produced by the IPPs.

The 12 independent producers operating in the country want the government to set out its plan for repaying this debt when it presents its mid-annual budget scheduled for July 23. This forecast should also include, according to them, the measures that will be taken to allow the national electricity company, the ECG to pay its suppliers on time.

Speaking on the mid year budget on July 23, Finance Minister, Ken Ofori-Atta said, “we have relegated ‘dumsor’ to the past. It is clear to our fellow Ghanaians by now that we have enjoyed three and half years of reliable and cheaper power. We have spent in excess of GH¢4.7 billion on capacity payments, not only to ensure that we keep the lights on, but also pay for power we do not use under very questionable contractual obligations we inherited”

The IPPs plea for payments wasn’t entirely seen in the abridged budget statement from the Finance Minister. Details of the statements are still being studied.

Source: Ghanamatters.com