Karpower threatens shutdown over $370 million debt 

The operators of the Karpowership located at Aboadze in the Western Region have notified the government that it will not be able to continue with the supply of power if the debt owed them is not settled immediately.  

The company’s representatives made this known at a meeting between the Minister of Energy and Green Transitions, John Abdulai Jinapor, and officials of the Karpowership barge at the ministry in Accra last Monday.

Karpowership, which currently produces about 450 megawatts of electricity to the national grid, has threatened to shut down its generation plant if the power distribution company, the Electricity Company of Ghana (ECG), fails to settle the debts which amount to over $370 million. 

The company at the meeting with the sector minister acknowledged the negative impact a shutdown of the power plant would have on the livelihood and general well-being of Ghanaians, but said it was left with no choice since the company could not continue to be saddled with huge debts.

Mr Jinapor emphasised the importance of Karpowership to the country’s power sector and gave the assurance that the government would immediately establish a payment plan to settle the outstanding debts owed Karpowership.

“We will prioritise making the required payments to ensure the continuous operation of the power generation company and engage in open and transparent communication with Karpowership,” he stated. 

The minister further expressed the government's commitment to resolve the financial issues to avert the imminent shutdown.

Accumulated invoices 

The Chief Commercial Officer (CCO) of Karpowership, Zeynep Harezi Yilmaz, who briefed the minister, said as of December last year, Karpowership received $39.60 million from ECG and $185.28 million from the Ministry of Finance. 

Currently, the company is owed over $370 million by the ECG, a situation that has had a dire consequence on the operations of the power generation entity.

Mr Yilmaz called on the government to compel ECG to clear the accumulated invoices presented to it immediately.

He appealed to the Energy Minister to compel ECG to respect the terms of its agreement, and ensure the nation derived the optimum benefit from the agreement.

“Should the Electricity Company of Ghana (ECG), for that matter the government, fail to respect the terms of the Power Purchasing Agreement (PPA) and make payment to the Karpowership; we would be left with no choice but to shut down our plant as we cannot continue to be saddled with huge debts,” he warned.

Context

The threat of shutdown is taking place in a period when the West African Gas Pipeline Company (WAPCo), the operator of the West African Gas Pipeline, has shut down its pipeline for routine maintenance.

The process has cut gas supply significantly from Nigeria through to Ghana, except for an average of about 90,000 million standard cubic feet per day (mmscf/d) of gas required to push the Pipeline Inspection Gauge from Nigeria to Aboadze which is being received by Volta River Authority plants at Shama. 

Although the government has procured some alternative fuel, it will take a couple of weeks for cleaning them up for use in the thermal plants.

The country’s only best bet in such situations until gas supply resumes is the use of expensive diesel fuel.