September 20, 2020
Clickongh

Make provision for our $1.4bn debt in mid-year budget – IPPs to Gov’t

Ahead of the presentation of the 2020 Mid-Year Budget Review in Parliament on Thursday,  July 23, the Chamber of Independent Power Producers and Bulk Consumers, CIPDiB, is asking government to capture the payment of the about USD$1.4 billion debt owed them in the budget.

According to the Chamber, which is made up of the Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited, the continuous accumulation of the debt is forcing them to contract costly loans to sustain their generations.

In an interview with Citi Business News, CEO of the Chamber, Elikplim Kwablah Apetorgbor, said the Independent Power Producers (IPP) may shut down their plants if payment doesn’t happen soon.

“As the Minister of Finance prepares to present to the nation how he intends to fund government activities for the remaining months of the year, we would like this budget to address specifically the debt that the government owes us. It has become very critical because we are seriously bleeding to fund our operations. As at 30th June, 2020, the cumulative indebtedness to the IPPs is about USD$1.4billion and it continues to accumulate.”

“Out of the 1.4 billion, 1.5 percent represents the unsettled legacy debt which dates from 2016. About 78 percent also represents the cumulative invoices from the PDS era till date and the remaining 20.5 represents the default claims with respect to our PPAs. We have been very supportive. Most of the time we have to go around to borrow funds to be able to support our power generation especially in these trying times. We cannot continue, so we want this Mid-year budget statement to address specifically how government intends to pay for these services,” he said.

He further noted that the budget should include measures to ensure that the shortfall in ECG’s revenues are addressed as and when they occur to ensure that IPPs and others who supply products or services to ECG are paid on time.

“That is the critical challenge of the sector. IPPs cannot be responsible for the government’s subsidies and other obligations. ECG is not able to generate enough revenue to pay for these invoices. And how does government intend to do the cover up,” he added.

Huge debt to Independent power producers could cause ‘dumsor’ – CIPDIB warns

Earlier this year, the Chamber of Independent Power Producers and Bulk Consumers, CIPDIB, warned that power consumers could be faced with severe power outages if the Power Distribution Services (PDS) fails to pay its huge debt to the Independent Power Producers (IPPs).

They also called on government to review taxes and levies imposed on electricity to bring some relief to consumers as it has made the industry uncompetitive, over-burdening industry and households.

Source: Business