200 million GhC released as partial payment for the debt of electricity producers

News of the Sunday, July 14, 2019

Source: Graphic.com.gh

2019-07-14

The Electricity Company of Ghana (ECG) has confirmed receiving 200 million Gh ¢ in partial payment of the debt of about 600 million Gh ¢ due to independent producers. According to the general manager of public relations and communication of the ECG, Mr. Dan Adjei Larbi, the funds were paid by the Power Distribution Service (PDS) Limited.

The Chamber of Independent Power Distributors and Large Consumers (CIPDIB) had threatened not to pay the outstanding 600 million Ghâ, but to close their production plants.

But Adjei Larbi, in a radio interview with Citi FM, based in Accra, dismissed remarks on Friday that the money would not have been released due to the threat posed by the CIPDIB.

Speaking about this, Mr. Elikplim Kwabla Apertorkpor, President and CEO of CIPDIB, said that they were not yet receiving money from the ECG.

"We were not engaged by the Ministry of Energy, but we had a conversation with ECG that the government had released 200 million Gh ¢ to pay part of the debt, but 200 million it's really nothing compared to the PPI's request … We will have a meeting to know our position and the way forward, "he said.

You will find below a copy of the statement published by CIPDIB.

CHAMBER OF INDEPENDENT ENERGY PRODUCERS, DISTRIBUTORS AND CONSUMERS IN BULK, GHANA (CIPDIB). DANGER! THE ENERGY CRISIS AT THE HEART OF THE GROWING DEBT OF THE ELECTRICITY SECTOR!

1. It should be recalled that the activities of the Ghana Electricity Company (ECG)

is criticized for perceived inefficiencies, which include the enormous indebtedness of electricity generators, particularly independent power producers [IPPs].

2. In this context and in view of the need to reorganize the GIC, successive governments have endeavored to improve the management of this very important institution to advance the country's industrialization agenda.

3. This effort eventually resulted in the resumption of certain operations and ECG management as of 1 March 2019 by the energy distribution service. [PDS].

4. The PDS, led by the private sector, was to provide a higher quality service to its ECG host.

5. This means that the different players in the electricity sector expect a lot from the PDS in terms of performance. Consumers, for example, expect a reliable, affordable and sustainable power supply.

6. With regard to the PPIs, it was expected that the PDS would respect and respect the terms of inherited electricity purchase agreements (PPPs), in particular by avoiding the delay in the payment of electricity purchases while respecting negotiated credit days.

7. Unfortunately, however, the PDS seems to relive some of the very bad contractual and commercial practices that characterized its host, the ECG.

8. The energy can not be stored or destroyed. This presupposes that consumers pay for the energy consumed and that PDS accumulates revenues. It is very frustrating that for the past four months, since March 1, 2019, PDS has not yet paid any PPI payments!

9. In the midst of this case, it might have been expected that PDS would engage stakeholders to inform them of potential difficulties, but efforts to date to bring PDS to its contractual commitments have resulted in virtually no result. .

10. In the meantime, the enormous financial indebtedness of PDS towards PPIs implies that they have to face enormous debts with their creditors and suppliers and must also pay the salary of the employees.

11. At present, most ISPs are stressed and have great difficulty managing their operating and management costs. Some have to depend on overdrafts to pay salaries and others.

12. For the sake of the country and its people, some electricity providers have taken a step forward by incurring additional financial costs by borrowing to obtain fuel to ensure reliable power supply.

13. Limited by these existential threats, the Chamber of Independent Power Producers and Heavy Consumers [CIPDIB], warns the consumer public of upcoming power outages, unless PDS fulfills its financial obligations with respect to the IPPs within 7 days.

14. CIPDIB urges the government, through the Ministry of Energy, to oblige PDS to explicitly release funds to pay all the bills accumulated to the IPPs within seven days.

15. CIPDIB also urges the government to oblige PDS to pay its debts to the PPIs; but this PDS must also pay interest on any late bills that the PPI could have used wisely.

16. We call on MiDA to oblige PDS to take measures to ensure best business practices, to comply with the terms of the power purchase agreements and to ensure that the country makes the most of the benefits of the EPA. Concession agreement.

17. We caution that if PDS does not comply with the terms of the APP and makes a payment to the PPIs within the 7 day period; our members will have no choice but to close their factories because they can not continue to be in debt with huge debts. This action, while having enormous implications for employment, can not be avoided.

18. We reiterate the need to de-politicize the electricity sector, to discourage undue political interference from the sector and to allow the sector to function as a mere business.

19. Finally, CIPDIB urges all players in the electricity sector to ensure the transparency of its transactions, as they are essential to the growth and sustainability of this sector.

Thank you.

Sign

Elikplim Kwabla Apetorgbor

Director General, CIPDIB.