The Electricity Company of Ghana (ECG) owes significant debts to the nine Independent Power Producers (IPPs) that support the state-owned energy sector, amounting to millions of US dollars.
One of these producers, Sunon Asogli, fully shut down operations in October 2024 over an outstanding debt of $259 million.
The remaining eight IPPs have also raised concerns about the government’s inability to pay for the power they have generated and supplied to the national grid.
Addressing the power crisis in an interview on Saturday, November 23, acting ECG Managing Director, Asamoah David, disclosed that the debt burden has been exacerbated by the instability of the foreign exchange market, which has significantly affected their financial capacity to settle obligations.
“The truth is that the majority of these debts are a result of a forex shortfall.”
He explained, “Each month, just from forex, we lose about 37 million. So, if you get the money and pay, getting the dollars becomes a problem. Sometimes, you will even make a payment, and it will take days or weeks before the IPPs receive it because of the dollar.”
Mr Asamoah added that the debt owed to Independent Power Producers (IPPs) arises primarily from payment challenges due to currency exchange fluctuations.
He clarified, “If payments were made in cedis, there would be no debt. But since payments are made in dollars, banks must convert the funds, and by the time the IPPs are paid, any increase in the exchange rate creates a shortfall.”
The cedi is currently trading at GH¢16.79 to the dollar and GH¢21.25 to the pound.
Year-to-date, the Cedi’s depreciation against the dollar stands at -27.20%.
Despite these challenges, Mr Asamoah assured that the Electricity Company of Ghana (ECG) is actively working to address the issue.
“We are doing our best to make payments,” he said, highlighting a new agreement with the IPPs that splits the payment responsibility between ECG and the Ministry of Finance.
“Just yesterday [Friday], I received a message confirming that the IPPs have accepted the arrangement.”
Under the new agreement, the IPPs have committed to resuming normal operations. Ing. Asamoah announced that Sunon Asogli is set to resume operations in the coming weeks, while other IPPs that had reduced power supply will gradually increase their output.
The IPPs, which are private firms supplementing Ghana’s energy needs, play a critical role in supporting state-owned infrastructure like the Akosombo plant, ensuring a stable power supply for the nation.