The Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDiB) has strongly reacted to a publication caused by the Deputy Minister of Energy, Hon. William Owuraku Aidoo which sought to accuse the Independent Power Producers of creating unnecessary tension and issuing threats to Government over the huge unpaid debt. The Minister also accused the IPPs of exhibiting traits of a pressure group.
In a statement issued in Accra by the Chief Executive Officer (CEO) of CIPDiB, Mr. Elikplim Kwabla Apetorgbor assured the public that the Chamber would never act in a manner that would undermine the relative stability in the power sector. “We are committed to working with government as key stakeholders for the advancement and long-term sustainability of Ghana’s power sector”.
According to the statement, the Energy Sector debt to IPPs which was 124 million dollars at the end of 2016, had ballooned ten-fold to 1.180 billion dollars as of 31st July 2020.
“Clearly, this is unsustainable and poses serious economic and financial risks to our members which is why we are being compelled to serve notice to Ghanaians about the possibility of a forced shutdown due to lack of funds to maintain our operations”.
It indicated with emphasis that one of the key objectives of CIPDiB is to contribute to the energy sector policy formulation that would facilitate Ghana’s economic development and could therefore not be merely described as exhibiting traits of a pressure group by Hon. Hon. William Owuraku Aidoo.
“Our overall goal is to ensure the long-term commercial viability of our membership who contribute 56% of the current generation capacity in the country; and that the Chamber’s engagement with the Government on policies which directly impact the power sector, must not be misconstrued as political.
The statement set the record straight that the Chamber and its members had no political motives in announcing a possible shut down. “This is based purely on commercial exigencies we currently face and not any political agenda. On average, IPPs, since 2017, are paid just barely 40% of power invoices on a monthly basis which is not enough to sustain operations, especially when these low payments have persisted for so long.”
Mr. Elikplim Kwabla Apetorgbor, CEO of CIPDiB
It said that their members had had to resort to loans in order to keep their operations going but at the cost of crippling debt service obligations which had become unsustainable, hence their demand for the prompt payment of overdue invoices to the tune of $1.44billion as at 30th September 2020.
“This is against the backdrop of the recent $1billion Eurobond issue which we expected to be used to pay these outstanding invoices. The Chamber has been agitating for the payment of these outstanding invoices for some time now. It is lack of tangible progress by way of payment which compels us to have to inform the public of the increasing difficulty in our members keeping the lights on”.
Adding that, “For the record, the implementation of the Cash Waterfall Mechanism (CWM) began on 1st April 2020 and not 2019 as put out incorrectly by the Honorable Minister. Secondly, the object of the policy was to ensure a more equitable and fair allocation of ECG’s collections per time, to generators going forward. Based on our understanding, it was not meant as a solution for the payment of outstanding invoices owed IPPs which amount to $1.44bn as of 31st July 2020”.
The statement appealed to the government to make timely payment of the debts owed IPP members to forestall the forced shutdown of their plants in the coming days due to the acute liquidity situation most of them find themselves in.
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