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Ghana settles 200 million dollars of its 700-million-dollar debt to IPPs

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Power Distribution Services (PDS) Ghana Limited has paid an amount of 200 million dollars to defray part of the 700-million-dollar debt to the main energy distributor, potentially averting an electricity crisis.

This comes barely a week after a story broke out in Accra suggesting that the country faces imminent power crisis as the Electricity Company of Ghana (ECG) had failed to settle its debt to the Independent Power Producers (IPPs).

The IPPs, through a letter, threatened to cease generating power for the country owing to operational challenges they entered after cessation of weekly and monthly payments to them by the ECG, which had transferred its assets to the PDS for management under a 20-year concession agreement.

ECG Confirms Receipt of Monies

The Electricity Company of Ghana (ECG) on Friday has confirmed receipt of GHS200 million from the Power Distribution Service (PDS) Limited.

This amount is expected to be used to defray part of the debt owed independent power producers in the country.

Last week the Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDIB) issued a seven-day ultimatum to the Ministry of Finance, to influence PDS to release funds to pay all outstanding debts to the IPPs which are in excess of 600 million dollars.

In an interview with Citi News, the General Manager for Public Relation and Communications at the ECG, Dan Adjei Larbi said the monies paid were not in reaction to the threats by the Chamber of Independent Power Producers, Distributors, and Bulk Consumers.

ECG received GHS200 million from PDS to pay the power producers.

This is not coming because of the threat that the IPPs issued.

“There has been an arrangement that whatever monies that PDS will collect, there is a portion for the power producers and because ECG has a power purchase agreement with the power producers the money will be transferred to ECG and then subsequently, ECG pays to the power producers. So, I don’t think the money was released out of the threat that was issued,” Larbi said.

PDS Initially Denies Owing 

The Power Distribution Services (PDS) initially came out to deny the fact that they did not have direct contract with the IPPs, although they are open to negotiations and further talks and that they were waiting for directives from the ministry to ensure that payments were effected.

Head of Public Relations of the PDS, William Boateng, came out on radio to deny having delayed payment to the IPPs, three months into the concession, which started on March 2019.

Payment Relieves Ghanaian power consumers

The payment of 200 million dollars, therefore, has brought some sort of relief to local power consumers, who dread the return of the power crisis of the past, which gained the notorious name, “Dumsor Dumsor”, meaning on and off, on and off.

As it stands now, Ghanaians are assured that with the payment of part of the debt, there will be enough power generation to promote economic growth.

– APA

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