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The government says plans are afoot to pay the USD$1.4 billion debt owed Independent Power Producers (IPPs) for the supply of power for electricity generation in the country.

According to Deputy Finance Minister, Charles Adu Boahen, delays in the payments are as a result of the ongoing renegotiation to beat down the high excess capacity charge as part of the government’s energy strategy.

Speaking on the Citi Breakfast Show on Friday, he says the move is to make significant savings on the capacity charge in terms of how much the country will have to pay.

“We are in the process of renegotiating some of these excess capacity charges and the idea is that we want to do it as a whole. There are some of the issues we need to address. We need to address the mechanism to ensure that the IPPs are paid in a regular graduated manner so that ECG and everybody is transparent. So the Cash Waterfall Mechanism has been implemented.”

This explanation and assurance come at a time when the Chamber of Independent Power Producers and Bulk Consumers, CIPDiB, is demanding the payment of monies owed them.

The power producers had asked for the payment to be captured in the 2020 mid-year budget review, a call that was not heeded to.

Explaining the reason for the silence of the payment in the budget, Mr. Adu-Boahen said: “in November 2019 when we presented the 2020 budget, we had in there the GHS3.6 billion to address these capacity charges which we thought we will have for the year, so that is why it was not included in the mid-year because it is still in there to accommodate these excesses”.

However, the Deputy Finance Minister was hopeful the IPPs will receive the monies by the end of 2020 once the renegotiation deal is concluded.

“We are sitting at the table to look at their financing structure and then renegotiate the capacity charges, plus any areas or shortfalls they have in their books and see how we can re-finance it going. These discussions have started, we have engaged one or two IPPs and we are doing it in a gradual manner. Hopefully, by the end of the year, we should have cleared them all up and we should be able to move on”, he assured.

Huge debt to Independent power producers could cause ‘dumsor’ – CIPDIB warns

The Chamber of Independent Power Producers and Bulk Consumers, which is made up of the Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited have complained that the continuous accumulation of the debt is forcing them to contract costly loans to sustain their generations.

Earlier this year, they warned that power consumers could be faced with severe power outages if the Power Distribution Services (PDS) fails to pay its huge debt to the Independent Power Producers (IPPs).

They have also called on the government to review taxes and levies imposed on electricity to bring some relief to consumers as it has made the industry uncompetitive, over-burdening industry and households.

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