GHc200m part payment released to IPPs

...as gov’t settles on weekly payment of arrears

Ing. Samuel Boakye -Appiah, Managing Director of ECG

The Ministry of Finance has released an amount of GHc200 million to the Electricity Company of Ghana (ECG) to settle part of its indebtedness to the Independent Power Producers (IPPs).

Disbursement of the amount which was done on Wednesday, July 10, according to the Chamber of Independent Power Producers and Bulk Consumers is expected to begin immediately among IPPs in the country.

Ghana has a total of about 15 IPPs but only five are operational and reliable and between them they produce more than 40 percent of the country’s total installed capacity.

The five comprise: Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited.

Mr. Elikplim Apertorgbor CIPDIB’s CEO, told the Goldstreet Business that government has assured of effecting weekly payments till the debt is cleared.

The US$700 million debt, he said includes both legacy and current bills due the IPPs.

In effect, the IPPs according to CIPDIB, expect ECG to demand all payments due them  from the PDS, for onward payment, in order to avoid further accumulation going forward.

The Goldstreet Business in its Monday, July 8 edition, reported that the Chamber of Independent Power Producers, Distributors and Bulk Customers(CIPDIB) issued a threat that its members would be compelled to shut down their plants if government fails to pay monies owed its members within seven days.

A statement issued and signed by Elikplim Apetorgbor last week, urged the government, through the Ministry of Energy, to compel PDS to expressly pay all accumulated invoices to the IPPs within the next seven days. The monies are being paid through ECG since that is the corporate entity with which the IPPs have an off-taker agreement, although end users of power now pay their bills to PDS.

The statement further urged the government not to only make PDS pay its debts to the IPPs, but also be made to pay interest on all overdue invoices, which the IPPs could have profitably utilized. It is unclear whether government has accepted the demand by the IPPs that interest should be paid on the debt in addition to the principal amount.

The Chamber also called on the Millennium Development Authority (MiDA) to compel PDS to adhere to best business practices and respect the terms of the PPAs and ensure that the nation derives the optimum benefit from the concession arrangement.

However, Power Distribution Services (Ghana) Limited has rebutted the claims by the IPPs that it owes the IPPs.

Head of Communications at PDS, William Boateng told the Goldstreet Business, “we don’t know any Chamber and we don’t deal with them. PDS has an agreement with ECG and not the IPPs. The Service, he said, is however ready to assist to resolve the challenges and to ensure efficiency within the electricity supply value chain.”