With just a day to the expiration of the deadline given by the Independent Power Producers to shut down over outstanding arrears, the group is yet to meet government for a favorable response.
The two parties were expected to meet this week for an agreement on demands for a 30 percent interim payment of the arrears.
Ghana is on the verge of a severe power crisis in the coming days if immediate measures are not taken to resolve this concern.
The IPPs argue that without receiving payment by close of June 30, they will be unable to sustain the national grid.
Sources close to Citi Business News suggest that the meeting is yet to be held with the power producers resolute with their threats to halt the operations of their plants starting July 1, 2023, unless the government addresses their challenge.
Elikplim Kwabla Apetorgbor, the Chief Executive Officer of the Chamber of Independent Power Producers, Distributors, and Bulk Consumers (CIPDiB), expressed their inability to convince creditors, contractors, and other essential stakeholders to further delay payments and maintain operations.
“Basically, we are saying that we lack the resources to continue generation beyond 30th June and we are giving them [Finance Ministry] up to March. We didn’t hear from them, but the fact is beyond June we just don’t have the resource to continue to supply.”
Mr Apetorgbor added that “all the IPPs are operating on borrowed funds and the critical part is our ability to pay our debt. The second quarter is about to end, so the six of us have no resources to continue to supply, so we are not going beyond June 30th.
Mr Apetorgbor also stated that the IPPs have rejected any form of debt restructuring because they cannot explain to their lenders that Ghana’s economy is in shambles and are unable to repay their debt.
“We have sacrificed a lot for the economy, the debt in question is already debt we have borrowed from our lenders and we can’t explain to them that we can’t pay because Ghana’s economy is in shambles, they won’t listen.”
Independent power producers play a significant role in Ghana’s energy sector, controlling 47 percent of the country’s total power generation mix and contributing 67 percent of Ghana’s thermal power.
As of May 2021, the six enterprises collectively claim an outstanding debt of approximately $1.73 billion in cedis, with the debt dating back to January 2021.
The IPPs highlight that this debt has hindered their access to working capital, preventing them from financing crucial inputs such as chemicals for water treatment in thermal generators and other supplies, many of which are priced in foreign currency, primarily the US dollar.
Source: Ghana Business