GHANA’S independent power producers (IPPs) have announced the suspension of a threatened shutdown, scheduled to begin on July 1, following an interim agreement reached with the state-run Electricity Company of Ghana. The IPPs, in a statement released late on Friday, stated that the temporary deal was reached in response to the arrears owed to them by the government.
Initially, the IPPs had rejected a government proposal in late May to restructure the $1.58bn owed to them by the state. This debt restructuring was part of Ghana’s strategy to implement a $3bn loan deal from the International Monetary Fund, which aimed to address the country’s severe economic crisis.
The IPPs had warned of potential power outages starting in July if they did not receive an interim payment of 30% of the arrears, intended to cover essential operational costs and address their own overdue debt service.
According to the group, they have now received an offer for an interim payment. The understanding is that during this grace period, the government and the Electricity Company of Ghana will work together to find a permanent resolution to the debt issue. The IPPs emphasised that if a satisfactory outcome is not achieved, they will have no choice but to proceed with their earlier decision to shut down, without providing any further notice.
This development brings temporary relief and a glimmer of hope for a permanent solution to the debt crisis between Ghana’s independent power producers and the government.