Ghana Power Producers’ Debts Rises Over Arrears of $1.5 Billion


By Moses Mozart Dzawu

Independent producers say they owe $400m for gas deliveries
Power suppliers await payment from distribution utility

Ghana’s independent power producers are running up debts for fuel deliveries as they wait for the distribution utility to pay $1.5 billion in arrears.

The 14 members of the Chamber of Independent Power Producers, Distribution Companies and Bulk Consumers owe gas suppliers more than $400 million, Elikplim Apetorgbor, the lobby’s chief executive officer, said by phone on Tuesday. The debts are mostly due to the state-run Ghana National Gas Co. and the West African Gas Pipeline Co., which transports the fuel from Nigeria.

The power producers are able to continue with operations only because the gas suppliers haven’t yet suspended deliveries, said Apetorgbor. “If they decide that I’m going to cut off gas supply to you, there’s nothing you can do,” he said.

State-owned distribution utility Electricity Co. of Ghana Ltd.’s indebtedness to power producers is totaling $1.5 billion, Apetorgbor said. The chamber’s members deliver about 1,500 megawatts to Ghana’s total peak demand of about 2,700 megawatts.

“For the sector to be out of its challenge, there needs to be prompt payment,” said Apetorgbor.
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The ECG’s director of finance, Francis Nimo Akonnor, wouldn’t immediately comment when contacted by phone.

Losses in the energy sector are contributing to the West African nation’s rise in public debt, which the International Monetary Fund estimated will reach 63% of gross domestic product by December, from 58% the year before. Net arrears in the sector amounted to 14 billion cedis ($2.5 billion) at the end of January while excess supplies of power and gas will add about $1 billion to Ghana’s liabilities in 2020, according to Finance Minister Ken Ofori-Atta.

A strategy to put the operations of ECG under private control was abandoned earlier this month when the government terminated an agreement with Power Distribution Services Ltd. for the management of the distribution network, less than eight months after the plan was first implemented.
(Adds cost of excess supply in seventh paragraph)

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