Energy sector debts need serious attention

One situation that Ghanaians never wish to go through again is the power outages that the country experienced in early 2013.

The country's power supply became erratic as a result of  inadequate generation capacity and breach of contract obligations to external partners. By 2015, the country had experienced unprecedented days and nights of blackouts because of acute electricity supply.

It is worth noting that Ghana had, even before the 2014-2015 power crisis, experienced power outages due to the country’s inability to add significant generating capacity over the years.

In 2004-2005, for instance, the country resorted to load shedding though it was not as frequent as during the period between 2013 and 2016.

We remember the #dumsormuststop campaign on social media by actress Yvonne Nelson who was subsequently joined by hundreds of citizens, ending in a vigil of protest against the power outages in Accra on May 16, 2015.

All this was the result of the dire socioeconomic strait that the power outages had plunged people’s livelihoods into. During that period, the country’s economy suffered greatly, with estimated losses of around $680 million, equivalent to two per cent of the country's gross domestic product then.

The effects of the power outages were far-reaching, impacting various sectors.

Production levels dwindled, profits plummeted, and thousands of jobs were lost. It took time for businesses to recover.

The effects on health care were equally huge. Hospitals struggled to provide quality care, with some even reporting increased mortality rates due to power outages.

The education sector did not fare any better. Schools were forced to close, disrupting the education of millions of students.

Agriculture had its fair share. Farmers suffered significant losses, as power outages affected irrigation systems and crop storage.

We have also not lost sight of small businesses such as barbershops, hairdressing salons and artisanal workers whose livelihoods were taken away or reduced significantly because of the unavailability of power.

The few who could afford generators had their cost of operation skyrocketing, resulting in huge losses and attendant loss of jobs, which contributed to the already precarious unemployment rate in the country. 

It was during  these monumental challenges that the government brought in the Karpower Barge, among other actions, to solve the problem. Karpowership Ghana Company Limited is currently supplying 470 Megawatts (MW) of power to the national grid to boost power supply, as disclosed by the Project Manager of the company, Michelle Hazel, a couple of months ago; a move that has ensured continuous, efficient and reliable power supply to the country.

Indeed, we are all too familiar with the dreaded intermittent power outages, referred to as “dumsor”, that plagued the country, especially at the peak of the crisis in 2014-2015.

Therefore, the recent threat by Karpowership to shut down its operations due to a $370 million debt owed by the Electricity Company of Ghana (ECG) [see Friday, February 14 2025 p20] brings back memories of those dark days. 

The threat by Karpowership reminds us that the country is not yet out of the woods regarding its energy challenges. With the West African Gas Pipeline Company (WAPCo) shutting down its pipeline for routine maintenance, the country’s power supply is once again under strain.

It is, however, a piece of good news that Karpowership Ghana says it is in discussions with the government to address accumulated debt, assuring the nation that it remains committed to finding a sustainable solution in collaboration with the government. (See Monday, February 17, 2025 edition, p60) 

The Daily Graphic therefore entreats the government to take immediate action to address the debt owed to Karpowership and any other independent power producer and ensure a stable power supply to avoid a repeat of the "dumsor" era.

In this vein, we urge the government to establish a payment plan to settle the outstanding debt of $370 million. But this is in the short term.

In the medium to long term, Ghana must consciously invest in renewable energy sources, such as solar and wind power, to reduce dependence on fossil fuels. 

All stakeholders, including power distributors such as the ECG and the Northern Electricity Development Company (NEDCo), consumers and the ministry responsible for Energy must start promoting and adopting efficient energy measures, such as reducing power consumption during peak hours.

Ghana can surely avoid another debilitating period of power outages and ensure a stable and reliable power supply for its citizens. But we can only get there by taking proactive steps to address the challenge.