The Independent Power Producers in Ghana are facing an imminent crisis as they contemplate shutting down their power plants in the coming days if the government does not resolve their debt, which has risen to more than $2 billion.
Following discussions with the Electricity Company of Ghana targeted at resolving the debt problem, the IPPs had initially decided against shutting down their plants.
However, despite the assurances made during these discussions, it appears that the agreements have been violated, leaving the IPPs disappointed and unsure of their future.
In response to the situation, the IPPs convened a meeting on Thursday and decided to continue producing electricity for the foreseeable future.
However, they expressed concern that it would become increasingly difficult to maintain the plants for an extended period of time without debt settlement.
Citi News was informed by a source present at the meeting that the situation has reached a critical level, with the Ghana National Petroleum Corporation unable to pay for gas transportation services due to unpaid government bills.
In addition, the West Africa Gas Pipeline Company may close its valves if the government does not take immediate action to satisfy its debt to the company, according to the source.
Stakeholders in the energy sector are alarmed about the possibility of a power crisis if IPPs decide to reduce their supply due to their accumulating debt.
IPPs play a significant role in the energy generation balance of the nation, controlling approximately fifty percent of it. However, the debt burden has severely hindered their access to working capital, limiting their ability to finance essential inputs such as chemicals for water purification in thermal generators, the majority of which are priced in foreign currency, primarily the U.S. dollar.
The IPPs have an urgent need to satisfy their debts in order to prevent a power outage and maintain the stability of the energy sector.