Our debt has worsened due to unstable forex market – ECG boss

The Electricity Company of Ghana (ECG) is grappling with a massive debt to the nine Independent Power Producers (IPPs) that support the country’s energy sector, with one of them, Sunon Asogli, halting operations in October due to a $259 million debt.

The other eight IPPs have similarly voiced concerns about the government’s failure to pay for the electricity they generate and distribute.

In an interview on Joy News’ Newsfile on November 23, 2024, monitored by Starr Fm, ECG’s acting Managing Director, Ing. Asamoah David, revealed that the situation had worsened primarily due to fluctuations in the foreign exchange market. “The truth is that the majority of these debts are a result of a forex shortfall,” Ing. Asamoah explained during the interview with Samson Lardy Ayenini.

He further detailed the financial struggles, “Each month, just from forex, we lose about 37 million. So, if you get the money and pay, getting the dollars becomes a problem. Sometimes, you will even make a payment, and it will take days or weeks before the IPPs receive it because of the dollar.”

Ing. Asamoah noted that the situation would improve if payments were made in cedis. “If it were in cedis, I would pay. But now, when I pay the money, the banks have to get the dollars and convert them before they pay the IPPs, and by the time they pay, if the dollar increases, it means we still have a shortfall.”

Despite these challenges, he emphasised that ECG is working hard to manage the payments. “So, for the payments, we are doing our best to pay,” he said, adding that a new agreement had been made with the IPPs. “ECG will pay part, and the Ministry will come in. Just yesterday [Friday], they sent me a message saying they have agreed,” he explained.

Ing. Asamoah also assured that the IPPs are on board with the new arrangement and will continue their operations. “Sunon Asogli will resume operations in the coming weeks, and other IPPs that had reduced their power supply will also increase their output,” he stated.

The IPPs play a crucial role in supporting the country’s electricity grid alongside the state-owned Akosombo plant, but the ongoing financial and forex issues continue to present significant challenges for the sector.