The sooner you honour obligations to IPPs, the better for all of us – Kofi Buah

Headlines The sooner you honour obligations to IPPs, the better for all of us – Kofi Buah
DEC 5, 2023 LISTEN

Deputy Minority leader, Emmanuel Armah-Kofi Buah, has reacted to announcements by Sunon Asogli Power (Ghana) Limited to shut down its plant for a week.

In a writeup, the Deputy Minority leader, noted the “unfortunate but unsurprising development” is indicative of the gross mismanagement that has plagued the energy sector under the Akufo-Addo-led government.

According to the deputy minority leader, “The once-thriving energy sector bequeathed to the Akufo-Addo/Bawumia government has now been thrown into complete disarray due to gross management of the sector.”

He attributed one of the contributing factors of the power crisis to the “continuous mismanagement and misapplication of the Energy Sector Levy Act (ESLA),” introduced by the previous NDC government to address energy sector debts.

The deputy minority leader indicated that while in opposition, “the NPP labelled the ESLA as a nuisance tax and promised to scrap same when they win political power,” only for the current government to, not only increase the ESLA levy, but has also “collateralised ESLA for fifteen (15) years to raise monies which they have misapplied, thus defeating its original purpose and eroding the gains made in settling all legacy debts in the sector. This has further exacerbated the financial instability of the power sector”.

The deputy Minority leader described the current state of the Electricity Company of Ghana (ECG) as “disquieting and of grave concern”.

He stressed that the ECG which plays “a crucial role in providing reliable supply of electricity to consumers, is unfortunately suffering from monumental mismanagement and inefficiency under the current administration” with the repercussions of the mismanagement of the energy sector “far-reaching,” while debts keep piling up by the day, as the threat of a power crisis continues to loom large.

The deputy Minority leader further emphasised the need for government to “demonstrate humility and leadership in engaging with the Independent Power Producers (IPPs) in order to address the imminent catastrophic power crisis”.

He, therefore, urged government to take steps to ensure it honours its obligations to the various IPPs.

“Due to the announced shutdown of the Sunon-Asogli Power Plant alone, parts of Accra were plunged into darkness last night.

The earlier this government took steps to honour its obligations to IPPs, the better it will be for all of us,” the deputy Minority leader warned.

Meanwhile, Sunon Asogli Power (Ghana) Limited has decided to postpone the shutdown of its plant for a week, citing intervention and assurances from the Ministers of Finance and State.

In a statement issued on Monday evening, the company revealed an interim payment agreement, anticipating $60 million in two tranches.

The first tranche of $30 million is expected this week, followed by the second tranche in the week of December 11, 2023.

“Kindly confirm our understanding that we shall be paid an interim sum of $60 million in two tranches. The first tranche $30 million to be paid this week and the second tranche in the week of 11th December 2023.”

The independent power producer had initially announced an indefinite shutdown of its 560MW plant, effective immediately, due to the government's delayed financial commitments.