Sunon Asogli Power suspends plant shutdown following government assurance
Sunon Asogli Power (Ghana) Limited has opted to postpone the shutdown of its plant for one week.
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The company cites this decision as a response to the intervention and assurances provided by the Minister of Finance, Ken Ofori Atta and a Minister of State.
In a statement released on Monday evening, the company said: “Kindly confirm our understanding that we shall be paid an interim sum of $60 million in two tranches. The first tranche $30 million to be paid this week and the second tranche in the week of 11th December 2023.”
The independent power producer had initially announced the indefinite shutdown of its 560MW plant, ceasing operations with immediate effect. This move was attributed to the government's delays in meeting its financial obligations to the power plant's management.
In a letter addressed to the Electricity Company of Ghana (ECG), the company expressed regret over the suspension of operations, citing "avoidable delays in payment from the GoG/Electricity Company of Ghana for power supplied, as well as the unproductive engagements to find an amicable solution" to the financial challenges.
Accumulating unpaid bills were highlighted as significantly impacting the company's operational capacity, rendering it unsustainable to continue without addressing these financial hurdles.
Independent Power Producers (IPPs) have long voiced grievances regarding the government's indebtedness to them. Despite various attempts, including threats to suspend operations, no substantial results have been achieved. As of July 2023, reports indicated that the government's debt to IPPs had reached about $1.6 billion.
The recent 1.52 percent reduction in electricity tariffs announced by the Public Utilities Regulatory Commission (PURC) was deemed unacceptable by IPPs.
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They argued that the reduction would hinder ECG's debt restructuring efforts. Dr. Elikplim Apetorgbor, the President of the IPPs, expressed concerns about the viability of continuing operations, stating, "We are on life support and cannot guarantee continuity. If you give us a haircut, say a 30% or 40% reduction, who is going to pay our debts for us?"
Read also: Govt lays out plan for Asogli debt payment