Strengthening power sector, a national priority - CIPDiB

The Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDiB) says strengthening the power sector, particularly the electricity distribution sub-sector, was a key rationale for private sector participation in the Electricity Company of Ghana (ECG).

CIPDiB said the technical and financial capability of the selected private sector partner would address the need for additional investment in the distribution system, complementing the US$500 million that would be provided by the Millennium Challenge Corporation (MCC).

In a statement signed by Mr Elikplim Kwabla Apetorgbor, Chief Executive Officer of the Chamber, and copied to the media said: “For us, members of the Chamber of Independent Power Producers (IPP’s) who provide over 2500MW reliable power generation capacity (representing over 60 per cent of the total generation in the power sector of Ghana), there are assurances that with private sector participation in ECG, delays in being paid for the power we generate would be a thing of the past.”

It said in countless stakeholder engagement sessions, the Millennium Development Authority (MiDA) and its Transaction Adviser, the International Finance Corporation (IFC), trumpeted these anticipated benefits of private sector participation. The statement said it was indicated that under the concession arrangement, the concessionaire would be paying in full all invoices of the power producers within 10 days.

“The concessionaire was also to put in place a revolving letter of credit, which could be called upon on the 11th day for settlement of the invoices. Furthermore, the concessionaire was expected to replenish the revolving letter of credit in two weeks to ensure that there was always sufficient funding to cover the power produced by the generators.

“Sadly, the reality we have experienced is that the receivable accounts position of the Independent Power Producers has deteriorated since the Power Distribution Services (PDS) arrangement came into effect.”

It said, on July 8th, 2019, the CIPDiB issued a statement about having gone for four months without any payments, bnut PDS came out in rebuttal claiming it had honoured its obligations to ECG, but that was later found out to be untrue! The statement revealed that the cumulative outstanding debt position of the Government of Ghana (GoG)/ECG to IPPs alone had escalated to about USD$1.5 billion!

“The CIPDiB is, once again, compelled to ask that payment of the obligations of GoG/ECG be made as a matter of urgency. Immediate disbursement from funds that have been built up in PDS accounts is essential to enable us to continue to produce power.”

“The energy sector is clearly under a serious threat, and we would urge the Government of Ghana and its agencies, including ECG and MiDA, as well as the MCC, to co-operate to ensure that decisions are taken to enable Ghanaians have access, affordably, to a reliable energy supply.”

The statement added that the CIPDiB, as a key stakeholder in the sector, was willing to engage in consultations about the process of securing private investment in the electricity distribution sub-sector in Ghana, and the interface with the generation sub-sector.

“Our experience in bringing in billions of dollars of private sector investment into power generation in Ghana makes us confident that this can also be done in the distribution subsector. With credible, transparent and fair processes, the right calibre of investors can be attracted.”

The CIPDiB remains committed to helping Ghana strengthen its power sector, so as to serve the needs of Ghanaians.