Ghana: We Don’t Have Agreement With You, So Go To ECG For Your Monies Instead Not Us -PDS Directs Cash-Trapped IPPs

The Power Distribution Service (PDS) Ghana Limited has denied claims by the Independent Power Producers (IPPs) that the service owes them huge sums of money for power supplied.

According to PDS, it does not have any contractual agreement with IPPs, as far as power purchase issue is concerned and, therefore, expressed surprise over their claims.

The response from PDS follows threats by the Chamber of Independent Power Producers and Bulk consumers (CIPDIB) that they will plunge Ghana into darkness if some $600m debt owed its members is not paid in eight days.

Chief Executive of CIPDIB, Eliplim Kwabla Apetorgbor, said the decision to cut power supply to PDS has been necessitated by debts they have incurred in running their operations.

These operations, he said, include fueling and maintaining their plants and paying workers.

Eliplim Apetorgbor said the six IPPs had a ‘wonderful marriage’ with the Electricity Company of Ghana until PDS took over the work of ECG.

ECG was paying IPPs every week from earning made from consumers, butt that stopped when PDS took over in March 2019.

Attempt to retrieve these debts have been met with resistance from PDS. They have also failed to respond to their demand letters or invitations to a meeting to discuss outstanding payments.

The way out, Mr. Apetorgbor threatened, is to stop supplying their 1,500 megawatts of power to PDS, which constitutes more than 50 per cent of what is required to meet the demands of consumers.

However, speaking on Accra-based Oman FM, William Boateng, who is the Head of Communications at PDS, said his outfit rather has a contract with Electricity Company of Ghana, which is currently bulk power trader, adding that PDS has not reneged on it.

“We have honoured all our concessional obligations to ECG. ECG gives us bulk bills and we pay every week,” he pointed out.

Background

It will be recalled that Manila Electric Company (Meralco) officially took over running of ECG from March 1st this year, under a 20-year concession agreement. 

The negotiated Transaction Agreements – namely the Lease and Assignment Agreement, Bulk Supply Agreement, and Government Support Agreement – to secure the proposed Private Sector Participation (PSP) in ECG were approved by Cabinet and ratified by Parliament.

The Concessionaire, according to the agreement, is expected to inject an amount of $580m into the distribution system during the agreement period’s first five years.

The Bulk Supply Agreement between ECG and the Concessionaire deals with the Concessionaire’s back-to-back purchase of the capacity and energy made available to ECG under the Power Purchase Agreements (PPAs).