Government halts payments to IPPs, GSs

An instruction to the Ghana National Petroleum Corporation (GNPC), Electricity Company of Ghana (ECG) and Power Distribution Services (PDS) to pay independent power producers (IPPs) and gas suppliers (GSs) has been withdrawn.

The instruction was given on Thursday, August 1 by the Ministry of Finance to have the IPPs and GSs paid only for power and gas consumed.

But after it initiated re-negotiations with the IPPs and GSs, the Ministry announced that wider consultations would have to be carried out.

A meeting hosted by the Ministry and the Energy Ministry with the IPPs and GSs decided to set up a steering committee under the Energy Sector Recovery Task Force to resolve the ‘take-or-pay’ power contracts.

The contracts, the Ministry has maintained, are crippling the energy sector and therefore having a bearing on the economy.

According to the Finance Ministry, there has been “active participation” of the IPPs and gas producers so far in the consultation process.

“Government welcomes the active participation of IPPs and GSs in the necessary task seeking a managed transition from the current model towards a balanced relationship capable of delivering fair, long-term energy solutions that reflect reality and ofer long-term sustainability for IPPs and GSs in Ghana,” a statement issued by the Coordinating Director of the Ministry, Michael Ayesu, on Friday said.

The consultation process is to take an initial three months.