Ghana: Gov’t Will Pay US$1.4 Billion Owed Independent Power Producers Ending Of 2020- Adu Boahen

The Government of Ghana has hinted of plans to pay the USD$1.4 billion debt owed members of the Chamber of Independent Power Producers, Bulk Distributors and Consumers (CIPDiB) for the supply of power for electricity generation in the country.

The independent power producers in the West African nation expected the country’s Finance Minister, Ken Ofori-Atta, to announce how the government intended to settle its indebtedness when he presented the 2020 mid-year budget but that did not happen.

However, speaking on Accra-based Citi FM, Deputy Finance Minister, Charles Adu Boahen said the delays in the payments are as result of the ongoing renegotiation to beat down the high excess capacity charge as part of the government’s energy strategy.

He said the move is to make significant savings on the capacity charge in terms of how much the country would have to pay.

“We are in the process of renegotiating some of these excess capacity charges, and the idea is that we want to do it as a whole. There are some of the issues we need to address. We need to address the mechanism to ensure that the IPPs are paid in a regular graduated manner so that ECG and everybody is transparent. So the Cash Waterfall Mechanism has been implemented,” he explained.

Explaining the reason for the silence of the payment in the budget, Mr Adu-Boahen said: “In November 2019 when we presented the 2020 budget, we had in there the GHS3.6 billion to address these capacity charges which we thought we would have for the year. So, that is why it was not included in the mid-year budget because it is still in there to accommodate these excesses.”

He was optimistic the IPPs would receive the monies by the end of 2020 once the renegotiation deal is concluded.

“We are sitting at the table to look at their financing structure and then renegotiate the capacity charges, plus any areas or shortfalls they have in their books and see how we can re-finance it going. These discussions have started. We have engaged one or two IPPs and we are doing it in a gradual manner. Hopefully, by the end of the year, we should have cleared them all up and we should be able to move on,” he assured the IPPs.

Source:www.energynewsafrica.com