Independent power producers have rejected a government proposal to restructure $1.58 billion in arrears owed them by the state, the head of the group told Reuters on Friday, warning non-payment could lead to a shutdown of their operations.

Ghana aims to cut $10.5 billion in interest payments on its external debt in three years to be able to successfully implement a $3 billion loan deal from the International Monetary Fund (IMF) aimed at addressing its worst economic crisis in a generation.

Elikplim Kwabla Apetorgbor, head of the Independent Power Producers (IPP) Chamber, said the restructuring proposal had been "corporately and individually rejected".

Apetorgbor said the producers, which account for over 65% of available thermal power, were unwilling to make concessions and were also almost on the verge of switching off their plants.

Minister of State at the Finance Ministry, Mohammed Amin Adam, said the decision was unfortunate.

“We will continue with the engagement with the individual IPPs in a transparent and pragmatic manner and threats of shutdown when you are in negotiations cannot be accepted at this stage.”

Amin said the government would continue making all efforts to restructure the debt.

The IMF has blamed shortfalls in Ghana’s energy sector on factors including low tariffs and excess capacity amid take-or-pay contracts, which it said had cost the central government some 2% of GDP per year since 2019.

On May 17, the oil, gold and cocoa-producing nation raised the electricity tariff by 18.36% for the second quarter of 2023 after hiking it by almost 30% in the first quarter.

The nation’s utilities regulator has said that tariffs will now be adjusted quarterly.