Sunon Asogli: IPPs yet to reach an agreement with govt

Independent power producer Sunon Asogli Power (Ghana) Limited has rejected accusations from the government of acting in bad faith, following remarks by Finance Minister Dr. Mohammed Amin Adam criticizing the company for shutting down its 560-megawatt power plant amid ongoing debt negotiations.

Sunon Asogli, in a statement on October 16, announced the plant’s closure, attributing the decision to the Electricity Company of Ghana’s (ECG) significant outstanding debt of $259 million, excluding fuel costs, as of September 2024.

The unpaid amount created severe financial strain for the power producer, hindering its ability to maintain normal operations.

The shutdown led to widespread power outages across various parts of Ghana, with many communities experiencing unreliable electricity supply.

In response, the government moved quickly to renegotiate terms with Sunon Asogli to restore stability to the national power grid.

Sunon Asogli maintains that the plant’s closure was a necessary action due to escalating operational costs and insufficient working capital.

Dr. Elikplim Apetorgbor, CEO of the Independent Power Producers’ Association, defended Sunon Asogli’s decision, contending that the government had not upheld its financial commitments, which left the company with few options.

The company’s leadership reiterated that they remain open to negotiations to find a lasting solution to the debt issue and ensure consistent power supply across the country.

“I am not aware when we have agreed to sign restructuring terms with anyone. We are still negotiating. No one goes into a negotiation to lose. It is always a win-win affair. And he [Amin Adam] has always maintained a position that if you will not accept this, I am not going to pay you. And even if we are signing, what it means is that we have reached a meeting point. But to the best of my knowledge, there is nothing like that. We are not there yet.

“He [the Finance Minister] has promised countless times to make payment to Sunon Asogli but he has not honoured those obligations or those promises. But today he’s saying that somebody is acting in bad faith. What is worse than that? You owe me about $259 million.

“Give me $60 million out of that for us to negotiate about the $2 million. And you are saying this is bad faith. We are faced with a challenge. We lack the working capital to resume operation or to continue operation.”

 

Source: Citi Business News