Minister of State at the Ministry of Finance, Dr. Mohammed Amin Adam, says without government restructuring the energy sector debt it will be unable to settle its arrears in the sector.

Defending government’s decision to cut debt owed independent power producers, Dr. Adam explained that the restructuring was necessary to aid government raise enough money to pay off its debts.

He was responding to criticism from the minority leader, Dr. Cassiel Ato Forson, that the government’s move to restructure energy sector debts could cause the collapse of several independent power producers.

According to him, the IPPs are not unique and thus the principle of debt restructuring must also apply to them if the government intends on getting the country’s economy out of the woods.

“How about the ddep? Are we saying that the people who had the bonds did not acquire them legitimately? So it’s the principle. We are doing that. We’ve done that to you, we’ve done that to myself, I don’t know about Ato if he had bonds, and Ghanaians accepted this challenge. They sacrificed so much and we thank them for that sacrifice.

“We’re doing the same thing to our external creditors, so how about IPPs? What makes IPPs so unique that we cannot apply the principle to them? Because everybody we applied that principle to has done something for us.

“Some have bought our bonds, some have provided services, some have given us loans to undertake government projects. So the principle is the principle. And we’re very happy that a lot have responded positively particularly the people of Ghana and I expect IPPs to also respond positively,” he said.

He noted that the IPPs have to agree to a debt restructuring.

“We have to raise the money together, and they have to understand that we have to raise the money to be able to pay them,” he said.

Meanwhile, Dr. Ato Forson has stressed that the plan to restructure he energy sector debt would be counterproductive.

He explained that cutting the arrears owed independent power producers would eat away their profitability and their survival.

“But you see we’re making a mistake. These IPPs, they’ve gone for a loan. The loans need to be serviced. They have provided you a service, they’re contractors. And if you are to say that you’re going to give them a haircut, you’re giving them a haircut on what?

“The arrears is owed to their bankers. So when you cut it, you’re cutting their profitability and their survival. And so we should be careful the road we’re charting. Because if care is not taken we’ll end up destroying these IPPs and they’ll not be able to be around to support us,” he said.