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ECG to meet Sunon Asogli today over $60million debt

Business & Finance ECG to meet Sunon Asogli today over 60million debt
DEC 8, 2023 LISTEN

The management of the Electricity Company of Ghana (ECG) is expected to meet with independent power producer Sunon Asogli Power (Ghana) Limited today, December 8, to discuss payment plans for a $60 million debt owed the power producer.

The power producer shut down on Monday, December 4, citing the government's delay in honouring its financial obligations to power plants as the reason. However, it suspended its decision for a week following an assurance from the government for the clearance of the debt.

It shut down after complaining that the accumulating unpaid bills had significantly impacted its operational capacity, making it unsustainable to continue without addressing the financial challenges.

Sunon Asogli only suspended its decision following the Minister of Finance and Minister of State’s assurance and wrote in an acknowledgement note that “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 meeting today will focus on modalities for clearing the debt owed by the government.

Independent Power Producers (IPPs) have, over the years, complained about the government's indebtedness to them. However, despite several efforts, including threats to suspend operations, no substantial results have been achieved.

As of July 2023, there were reports that the government's debt to the IPPs had reached about $1.6 billion.

The IPPs have described the recent 1.52 percent reduction in electricity tariff announced by the Public Utilities Regulatory Commission (PURC) as unacceptable.

The IPPs argue that the reduction will affect ECG's debt restructuring efforts. The President of the IPPs, Dr. Elikplim Apetorgbor, has stated that ECG will struggle to pay its debt.

— Citi Newsroom

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