Independent Power Producers Warn of Potential Exit from Power Purchase Agreements Restructuring Talks With Gov’t

The Chamber of Independent Power Generators Ghana (IPGGs) has voiced alarm over significant delays in securing government approvals for the restructuring of Power Purchase Agreements (PPAs), warning it may abandon the process and revert to existing contractual terms unless swift action is taken.

In a letter addressed to Finance Minister Dr. Mohammed Amin Adam, the IPGGs, chaired by Togbe Afede XIV, urged an urgent meeting to resolve the impasse, cautioning that any further delay could have dire consequences for Ghana’s power supply stability.

“This meeting must occur at the earliest opportunity next week,” the statement noted, “as any further delay could be catastrophic for the nation’s power supply.”

The IPGGs expressed particular frustration, having previously made substantial concessions to aid the government’s debt restructuring efforts, which were necessary for the country to secure International Monetary Fund (IMF) support.

The Chamber highlighted that many of its members accepted a haircut on arrears and deferred payments to enable the government to meet its financial obligations under the IMF programme.

However, less than a year later, the Electricity Company of Ghana (ECG) is reportedly in default on payments totaling $1.4 billion, leaving power producers “highly betrayed.”

The Chamber’s statement indicated that, unless the government swiftly fulfills its obligations, IPGGs members will have no option but to enforce their contractual rights, a move that could undermine ongoing negotiations and jeopardize the reliability of Ghana’s electricity supply beyond August 30, 2024.

With the nation’s power sector facing mounting uncertainty, the Chamber’s appeal underscores the urgent need for a resolution to prevent further destabilization of the country’s energy infrastructure.

Source:norvanreports.com