• Wednesday, November 29, 2023
businessday logo


Ghana has a power problem: It’s got too much power it cannot pay for it

Nigeria’s prosperity depends on getting power sector right – UK Envoy

Ghana which has been a shining example of how to ramp up power supply to its people is now having to grapple with how to pay for all the power the country is getting.

The situation came near a boiling-point but the country’s independent power producers (IPPs), nine in number have now suspended a threatened shutdown from July 1 after reaching an interim deal with the state-run Electricity Company of Ghana over arrears owed to them, the group said in a statement at the weekend.

In late May, the IPPs with a 50% market share, ejected a government proposal to restructure $1.58 billion in arrears owed them by the state as part of the West African nation’s efforts to implement a $3 billion loan deal from the International Monetary Fund aimed at addressing its worst economic crisis in a generation.

The group later warned of outages from July if its members did not receive an interim payment of 30% of the arrears to cover key operational costs and their own overdue debt service.

The shutdown would have plunged many parts of Ghana into darkness, as the IPPs produce 67% of thermal power in the country and control half of the electricity generated.

Ghanaian former president John Dramani Mahama had urged the IPPs, who produce 2,000 megawatts of power, to suspend the planned shutdown to enable negotiations with the government.

Read also: Ghana does not seek to monopolise the African-American Diaspora – Anane-Nsiah

Mahama asked the state to honour the debt obligations to avert far-reaching consequences that can befall the country if power supply is cut for a whole week, or even longer.

Under the new agreement reached, the power producers have received an interim payment offer with the understanding the government and Electricity Company of Ghana will use the grace period to work towards a permanent resolution to the debt issue, the group said.

If this outcome is not reached, “the IPPs will be left with no other choice than to revert to their earlier decision to shut down without any further notice,” it said.