Managing Director of the Electricity Company of Ghana, Samuel Dubik Mahama, says legacy debt owed Independent Power Producers has been ring-fenced.

According to him, the offer of payments for the legacy debt is yet to be had; however, the ECG has committed to pay for whatever it takes from the IPPs starting this July onwards.

This follows negotiations between IPPs and the ECG to address the $1.73 billion owed them.

Speaking on JoyNews’ PM Express, Mr. Mahama said, “I’m not looking at the legacy debt; I’m trying to stay current moving forward. The legacy debt has been ring-fenced and that conversation is yet to be had. [The legacy debt] is around 2 billion now.

“Up to June ring fenced. Now we’re in July, what we take from the power plants this July we’re going to make sure that we pay per the new conversations that we’ve had. If even we’re not going to reach the [agreement] we should make sure that a substantial of that amount is paid.”

The Chamber of Independent Power Producers of Ghana (IPPG), suspended the planned shutdown of power plants following fruitful engagements with the Electricity Company of Ghana (ECG).

The Chamber had in a memo, directed its members to shut down their plants from July 1 to July 8 if the government fails to pay 30 percent of the 1.73 billion dollars owed them.

But according to a statement released by the chamber on Friday, June 30th, the IPPs have agreed to keep operating their power plants after July 1, 2023.

As part of the understanding reached, all the IPPs have received an offer of payments from ECG to enable them to operate in the interim thereby providing the government of Ghana and ECG the needed grace period to address the outstanding arrears in the energy sector and to meet their contractual obligations.

The IPPs are optimistic that this agreement reached would help yield the desired outcome of providing a permanent resolution to the energy sector debt failing which the IPPs will be left with no other choice than to revert to their earlier decision to shut down without any further notice.

Reacting to the situation, Mr. Mahama noted that a recent agitation from IPPs is as a result of growing uncertainty concerning the country’s debt.

“Why are we where we are now? It’s because there’s lack of certainty. Nobody is saying that you shouldn’t owe. What makes you a good [debtor] is how you service your debt. That’s what gives you the confidence or that allows something to be a growing concern,” he said.