Adnan Adams Mohammed
Ghana has been negotiating with the Independent Power Producers (IPPs) since last year to rework the arrears as part of its external debt revamp.
However, in recent concern raised by the private power producers, they are threatening to walk away from the US$1.6 billion arrears payment negotiation.
This is huge threat to the success of the efforts made for the past years to restructure the country’s debts.
“The government has not kept its side of the bargain on payments, despite some producers agreeing to haircuts and others cutting energy charges”, Elikplim Apetorgbor, chief executive officer of Independent Power Generators Ghana, has said in an interview last week. “We were expecting that by now half of the outstanding would be settled and a payment plan prepared for the remainder.”
“We are compelled to re-evaluate our concessions and may be forced to demand the full settlement of arrears”, he emphasized.
The government has paid about US$400 million as of the end of December, Apetorgbor said. Part of the deal with the IPPs was for the state-owned power distributor Electricity Company of Ghana to remain current on its payments to them from June 2023 onward. But it was only paying 70% of the monthly bills and cut that to 21% in the last three months, Apetorgbor said.
However, according to Bloomberg news on the same matter, “a Finance Ministry spokeswoman didn’t immediately respond to requests for comment.”
The country is restructuring almost all of its US$45 billion of debts to make them sustainable under an International Monetary Fund program. This standoff could potentially affect that assessment.
Ghana won an IMF bailout in 2023 after debt ballooned and it missed a eurobond payment. It concluded a domestic debt rework last year and hopes to soon finalize talks to reorganize US$5.4 billion of loans and US$13 billion of eurobonds.
The nine member-IPGG produces over 60% of Ghana’s peak demand of 3,618 megawatts and 80% of its thermal generation.
