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Tag: Chamber of Independent Power Producers

  • Impending ‘Dumsor’ as chamber of IPPs orders power supply suspension from July 1

    Impending ‘Dumsor’ as chamber of IPPs orders power supply suspension from July 1

    From July 1st, an imminent power crisis looms as the Chamber of Independent Power Producers (IPPs) has instructed its affiliated members, including Sunon Asogli, Cenpower, Karpowership, AKSA, Twin City Energy, and CENIT, to reduce their electricity supply to the national grid. This directive, which entails refraining from nominating power generation or declaring power availability to the system operator, is expected to remain in effect until July 8th.

    The Chamber in an email directing its members and sighted by Citi News said, “Further to our planned industrial action on July 1, 2023, we would like each IPP to nominate nothing (zero nominations) and not declare an availability to the System Operator, beginning July 1 to July 8, 2023”.

    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 favourable response prompting this latest order.

    The two parties were expected to meet this week for an agreement on demands for a 30 percent interim payment of the arrears.

    The IPPs argue that without receiving payment by the close of June 30, they will be unable to sustain the national grid.

    “We are determined to get results at all cost,” the mail concluded.

    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.

    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.”

    The IPPs have also 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.

  • ECG’s debt to IPPs nears US$1bn – Report

    The Electricity Company of Ghana (ECG) owes Independent Power Producers (IPPs) some US$996million for power purchased.

    The arrears, accumulated between 2021 and this year, stood at US$900million as at last May but have now risen to US$996million at the end of September 2022 due to ECG’s inability to fully pay for the power it buys from generation firms.

    The debt had dropped significantly to about US$400million at a certain point last year, but has jumped close to the billion-dollar mark.

    Meanwhile, between January and September this year the amount due the IPPs was US$1.5billion – of which only US$545million has been paid.

    The Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDiB), a mouthpiece for the IPPs, had earlier this year lamented that the situation was causing IPPs to record huge forex and interest losses.

    “The problem is that looking at the cedi’s free-fall and the time of our reconversion to pay our suppliers or lenders, we end up making a lot of forex losses,” its Chief Executive Officer, Elikplim Kwabla Apetorgbor, told the B&FT.

    He said this in May when the cedi enjoyed relative stability and the general economic outlook was somewhat positive, and insisted that companies which have contracted loans were recording huge interest and forex losses because of outstanding payments due them.

    State-owned ECG, the country’s main power utility, buys electricity from IPPs and others and distributes to consumers in southern parts of the country.

    However, due to weak revenue collection, the ECG is in some cases unable to pay for as much as half the power it buys from generation companies like IPPs and state-owned Volta River Authority, leading to a build-up in arrears.

    For instance, its annual losses – technical and systemic – are about 30 percent of its revenue: far above the regulator’s allowable loss margin of 23 percent.

    As a result, the company loses around GH¢3.2billion yearly, according to Minister of Energy, Dr. Matthew Opoku Prempeh.

    If not addressed, it is feared that the arrears could pile up to unsustainable levels.

    Source: Ghanaweb