Sunon Asogli Power (Ghana) Limited, an independent power producer, has indefinitely shut down its 560MW plant, thus suspending its operations with immediate effect.
The company says the decision is because of the government’s delay in honoring its financial obligations to the management of the power plant.
The company, in a letter addressed to ECG and sighted by Citi News, reads: “Sunon Asogli Power (Ghana) Limited Company announces with regret an indefinite suspension of operations at the Sunon Asogli Power Plant, effective Monday, 4th December 2023 at 6 PM. This difficult decision became necessary due to avoidable delays in payment from the GoG/Electricity Company of Ghana for power supplied, as well as, the unproductive engagements to find an amicable solution” to the indebtedness.
The company complained that the accumulating unpaid bills have significantly impacted its operational capacity, making it unsustainable to continue without addressing these financial challenges.
Independent Power Producers (IPPs) have over the years complained about the government’s indebtedness to them. However, several efforts, including threats to suspend operations, have not yielded any substantial results.
As of July 2023, there were reports that the government’s debt to the IPPs had hit about $1.6 billion.
The IPPs had described the recent 1.52 percent reduction in electricity tariff announced by the Public Utilities Regulatory Commission (PURC) as unacceptable.
The IPPs said the reduction would affect ECG’s debt restructuring efforts.
The President of the IPPs, Dr. Elikplim Apetorgbor, said the ECG will struggle to pay its debt.
He further indicated that “We are on life support and cannot guarantee continuity. If you give us a haircut, say a 30% or 40% reduction, who is going to pay our debts for us?”