Six Independent Power Producers (IPPs) which currently supply about 1,500 megawatts of electricity have threatened to shut down their plants if Power Distribution Services (PDS) Limited fails to settle debts amounting to over $700 million within eight working days.
While acknowledging the negative impact a shutdown of power plants will have, they said they are left with no choice since they cannot continue to be saddled with huge debts.
According to them, as at the time the Electricity Company of Ghana (ECG) was taken over by PDS, they were owed over $400 million.
They said ever since PDS took over, it has not paid them a dime, resulting in accumulation of another debt of over $300 million, bringing the total debt to over $700 million.
The companies – Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited – are members of the Chamber of Independent Power Producers and Bulk Consumers (CIPDIB).
Chief Executive Officer (CEO) of CIPDIB, Mr Elikplim Kwabla Apetorgbor, in a statement, urged the government, through the Ministry of Energy, to compel PDS to clear the accumulated invoices presented by the IPPs within eight working days.
He also wants PDS to pay interest on all overdue invoices which the IPPs could have profitably utilised.
He charged the Millennium Development Authority (MiDA) to compel PDS to adhere to best business practices and respect the terms of the PPAs and ensure the nation derives the optimum benefit from the concession arrangement.
“Should PDS fail to respect the terms of the PPA and make payment to the IPPs within the seven to eight working days period; our members would be left with no choice than to shut down PDS’ plants as they could not continue to be saddled with huge debts,” he warned.
Mr Apetorgbor stated that following a successful concession, IPPs expected PDS to honour and abide by the terms of the Power Purchase Agreements (PPAs) inherited, particularly by avoiding the delay in paying for power purchases, with respect to the bargained credit days.
He regretted that PDS appears to be reliving some of the very bad contractual and business practices that characterised the operations of ECG.
He explained that energy can neither be stored nor destroyed, which presupposes that consumers are paying for the power consumed while PDS is accumulating the revenues.
“It is very frustrating to note that PDS, for the past four months since taking over from March 1, 2019 to date, has not remitted any payment to the IPPs yet.
“In the midst of this issue, one would have expected PDS to engage the players in a bid to inform them of any challenges, if there is, but efforts so far made to cause PDS to honour its contractual bargains have yielded virtually no result,” he complained.
Mr Apetorgbor lamented the huge financial indebtedness of PDS towards the IPPs, which implies that the IPPs are saddled with huge debts to their creditors and suppliers, and were also challenged in paying employees’ salaries.
At the moment, he said most of the IPPs were stressed and finding it extremely difficult to manage their operations and management costs, to the extent that some have to depend on overdrafts to be able to pay salaries and others.
“For the love of country and its people, some IPPs had gone a step further to incur extra financial cost in borrowing to procure fuel to ensure reliable power supply.
“Constrained by these existential threats, the Chamber of Independent Power Producers and Bulk Consumers (CIPDIB) is by this release alerting the consuming public of looming power outages unless PDS fulfils its financial obligations to the IPPs within a seven-day period,” he added.
Source: The Finder