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Only 4 out of 9 IPPs have been paid by ECG – Bright Simons

Vice president for Imani Africa, Bright Simons has claimed that only four out of nine Independent Power Producers (IPPs) have received money from Electricity Company of Ghana (ECG).

According to him, the IPPs were paid less than $9.5 million in January 2024, despite the initial amount of $43 million dollars.

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Taking to the X platform  Bright Simons indicated “I always tell folks that the secret to policy analysis in Ghana is to watch what folks in power do, not listen to what they say. They said ECG pays $43m to private power producers monthly, no? Turns out in Jan, they paid only 4 out of the 9 IPPs. And it was less than $9.5M”.


In 2023, government announced that it had reached an agreement with IPPs to address Ghana’s indebtedness threatening the energy sector.

In an interview with the media, the Minister of State for the Finance Ministry, Dr. Mohammed Amin Adam indicated that the $43 million dollars was to solely address power generated and utilized by the government.

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 He revealed that the energy distributors have accepted to receive “some monthly payments of about $43 million in every month”.

“We have negotiated with them [IPPs] and we’ve agreed to some monthly payments and in every month, about $43 million shared amongst them for energy supply [energy consumed] because you know that they have excess capacity and so we have negotiated with them to pay for energy consumed which means we are currently not paying for the excess that we do not consume,” he said.

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He emphasised that the IPPs have so far been paid twice ever since the agreement was reached.

According to him, since the agreement was reached, the IPPs have been settled twice.

“In July, we paid $43 million. ECG has just paid for August $43 million, two, three days ago and that is going to continue. We want to be current.

“Also , because under our IMF programme we have to be current with our payments, we are not supposed to rebuild arrears and so that is satisfactory to the IPPS and that was why they came out with the statement to call off their threats,” he explained.

Background

On May 28, Independent Power Producers (IPPs) and distributors issued a threat to disconnect power supply to the national grid by the end of June 2023 if the government did not settle its outstanding debt.

These IPPs collectively control more than 65% of the available thermal generation capacity in the country.

Despite numerous appeals from various stakeholders urging the IPPs to reconsider their decision, they remained steadfast, insisting on a 30% payment of the debt owed before resuming power supply.

However, a significant development occurred on June 30, as the IPPs released a statement announcing the suspension of their planned power plant shutdown. This decision followed what they described as productive discussions with the Electricity Company of Ghana (ECG).

Previously, the Chamber had instructed its members to cease operations from July 1 to July 8 if the government did not fulfill the condition of paying 30% of the $1.73 billion owed to the IPPs.

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