Indefinite national black-out looms PDS fails to pay over US$300m to IPPs

PDS President, Mr. Ireneo B. Acuna, exchanging pleasantries with Fred Asamany (left) of Marinus Energy, owners of Atuabo Thermal Plant

The Independent Power Producers (IPPs) in Ghana are gearing up to switch off the lights across the country this week as a result of the inability of Power Distribution Services (PDS) to respect contractual provisions in the Power Purchase Agreements it inherited from the Electricity Company of Ghana in March this year.

The Chamber of Independent Power Producers and Bulk Consumers [CIPDIB] has warned Ghanaian power consumers of likely widespread power outages in the coming days if the PDS fails to pay its huge financial debt to IPPs.

As at the end of June, PDS, according to the Chamber of Independent Power Producers and Bulk Consumers (CIPDIB), owed all the IPPs over US$300 million for power they have supplied but which they have not been paid.

The Chief Executive Officer of CIPDIB, Mr. Elikplim Kwabla Apetorgbor in a statement to the Goldstreet Business urged the government through the Ministry of Energy to compel PDS to expressly pay all accumulated invoices to the IPPs within seven days.

Failure to honour the call, the Chamber said, will lead to indefinite power outages until the payment is made, as the IPPs would stop generating the power which PDS distributes to households, enterprises and public institutions.

Currently IPPs supply about 1925 MW of electricity, which is about 44 percent of the country’s total installed capacity and nearly half of its dependable capacity. If all the IPPs stopped generating electricity then conceivably, power generation would be cut by half nationwide.

The leadership of CIPDIB emphatically stated that “should PDS fail to respect the terms of the PPAs and make payments to the IPPs within 7-8 working days period, its members would be left with no choice than to shut down PDS’s plants as IPPs can no longer continue to be saddled with huge debts”.

CIPDIB urged the government not only to make PDS pay its debts to the IPPs; but also, to make it pay interest on all overdue invoices which the IPPs could have profitably utilized.

The IPPs through the CIPDIB has also called on the Millennium Development Authority – the American institution of state which supervises the power compact under which PDA has been given a 20  year concession to take over the activities of ECG –  to compel PDS to adhere to best business practices and respect the terms of the PPAs and thus ensure the nation derives the optimum benefit from the concession arrangement.

The need to revamp the ECG culminated into the takeover of the operations and management of ECG by the PDS from early March this year.  The PDS, being private sector led, was expected to deliver better quality service than its host, the ECG.

Efforts by the Goldstreet Business to reach the Communication Department of PDS at the weekend for comments on the matter were unsuccessful.