The International Monetary Fund, IMF has advised the government of Ghana to cut down the number of Independent Power Producers, IPPs in the country.
The IMF said the financial challenges facing the energy sector needs some strict steps that will help prevent crisis in the sector.
Country director for IMF, Albert Touna Mama speaking at a forum in Accra said just as the banking sector cleanup there must be a cut down in the number of IPPs.
"This has to be the next emergency after the banking sector has been addressed and I think that this is the way the authorities need to tackle that, the urgency is similar to what it was perhaps more than the banking sector, the Ministry of Energy and Cabinet I think just passed the energy sector recovery plan, but I just mention a few issues that are coming from the sector that are threatening spending ............ not only that the country is making loses in the sector from high-cost power, overcapacity for perhaps the Independent Power Producers are too many...."
IPPs on debt owe them
The Chamber of Independent Power Producers and Bulk consumers (CIPDIB) this week said they will plunge Ghana into darkness if some $ 700 m debt owed its members is not paid in eight days.
Explaining the situation, the Chief Executive of CIPDIB, Eliplim Kwabla Apetorgbor, said the decision to cut power supply to PDS has been necessitated by debts they have incurred in running their operations.
These operations, he said include fueling and maintaining their plants and paying workers.
CIPDIB in a statement said, "We caution that should PDS fail to respect the terms of the PPA and make payment to the IPPs within the 7-day period; our members will be left with no choice than to shut down their plants as they cannot continue to be saddled with huge debts. This action although has huge implications for jobs - cannot be avoided."
PDS reacts
The Director of Public Relations at the Power Distribution Service (PDS), William Boateng has refuted claims the service owes Independent Power Producers huge sums for power supplied.
In an interview with Joy FM, William Boateng also denied claims that PDS has failed to honour its financial obligations to the IPPs since it took over the distribution of power from the Electricity Company of Ghana in March 2019.
William Boateng said the PDS has no contract with the Independent Power Producers. They, therefore, owe the IPPs no obligation to respond to their correspondents or make payments to them.
“Mr. Apetorgbor got it wrong there,†Boateng said on the SMS Monday. Explaining this, Mr. Boateng said PDS has a contract with ECG and it has not reneged on it.
“We have honoured all our concessional obligations to ECG. ECG gives us bulk bills and we pay every week,†he pointed out.