Ghana: Government to Engage IPPS Over U.S.$ 700 Million Debt

Power Distribution Service (PDS) has denied claims it has failed to pay to Independent Power Producers (IPPs) for power supplied since taking over the Electricity Company of Ghana (ECG) on March 1 this year.

William Boateng, Director of Communications, PDS, said the PDS neither owes nor have a contract with the IPPs.

"The IPPs got it wrong. PDS does not have a contract with them or owes them. And as a result, we have no obligation to respond to their correspondents or make payments to them," he stated in an interview on Joy FM in Accra yesterday.

Rather, Mr. Boateng said PDS has a contract with ECG which it has not reneged on.

"We have honoured all our concessional obligations to ECG. ECG gives us bulk bills and we pay every week. I will advise the IPPs to seek audience with ECG, which might have an agreement with them," he added

Mr. Boateng was responding to the decision by the Chamber of Independent Power Producers and Bulk consumers (CIPDIB) to cut supply of power to PDS if the US$700 million debt owed its members was not paid in eight days.

The Chamber, which is comprised of Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited, supplies 1,500megawatts of power to PDS.

Chief Executive of CIPDIB, Eliplim Kwabla Apetorgbor, said the decision to cut power supply to PDS has been necessitated by debts incurred by members in fueling and maintaining their plants as well as paying workers.

Before PDS, he said the ECG paid the six IPPs weekly from earning made from consumers which he explained, was stopped when PDS took over this year.

"We have made several attempts to retrieve these debts but our efforts have been met with stonewalling from PDS. They have also failed to respond to their demand letters or invitations to a meeting to discuss outstanding payments," he stated

The way out, Mr. Apetorgbor said, was to cut power supply to the PDS.

In a related development, government has directed the Energy Minister, John Peter Amewu, to engage the six IPPs threatening to shut down their plants over debts owed them.

According to Kojo Oppong Nkrumah, Minister of Information, the government is in the process of renegotiating various power deals to reduce payment to IPPs.

He said the current US$1 billion paid to IPPs annually was due to take or pay arrangement in most of the agreements.

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