Dumsor looms as Sunon Asogli shuts down 560MW power plant over $259 million debt owed by ECG

Sunon Asogli Power (Ghana) Limited has announced the shut down of its 560MW power plant, effective from Tuesday, October 8, due to the Electricity Company of Ghana's (ECG) failure to honour its payment obligations.

In a press release, the company explained that the action was a direct result of ECG’s inability to pay its outstanding debt, which had accumulated over time.

Sunon Asogli highlighted that despite being patient and considerate in its dealings with ECG and the government, it had been left with no choice but to cease operations due to the growing financial burden.

As of September 2024, ECG owes Sunon Asogli a staggering $259 million in overdue payments, a 23% increase in the debt since January 2024.

"We regret that we have been compelled to suspend operations," said Sunon Asogli in its statement. "This difficult decision was necessitated by our inability to fund operations because of ECG’s failure to fulfill their overdue payment obligations and their various promises to that effect."

The company emphasised that, unlike many independent power producers, it had not invoiced ECG for accrued idle capacity charges, showing significant patience over the years. However, the company revealed that only 22.6% of the invoices due between January and September 2024 have been paid through the Cash Waterfall Mechanism.

“We deeply regret the impact of this decision on the national power supply,” the statement continued, indicating the company’s expectation that the Ministry of Finance would intervene to resolve the debt crisis and facilitate the resumption of operations to avert frequent power cuts locally known as dumsor.

This shutdown marks a critical moment for Ghana's energy sector, raising concerns about potential power shortages and the financial stability of independent power producers.