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Business News of Monday, 15 July 2019

Source: citibusinessnews.com

AGI urges government to prevent any deliberate power plant shutdowns

The Association of Ghana Industries (AGI) has charged the government to deal decisively with issues that threaten the reliable supply of power to homes and industries in Ghana.

The AGI’s reaction follows the threat from the Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDIB), to shut down their power plants if the Ministry of Finance, fails to influence the Power Distribution Services Ghana Limited (PDS) to release funds to pay all outstanding debts to the IPP’s which are in excess of 600 million dollars.

Even though PDS released some GH¢200 million last week, the CEO of the AGI, Mr. Seth Twum Akwaboah reminded government that, any challenges with the supply of power could have a negative impact on Ghana’s industrialization drive.

“I think that whatever it will take to resolve this kind of issues, we should resolve it and I don’t think this is beyond the capacity of government to resolve. If it’s a question of being paid for the service they’ve provided, which business can continue to provide service when it’s not being paid. So if indeed they are not being paid then it has to be looked at, with all challenges being resolved. The thought of shutting down should be completely out of the question.”

Mr. Akwaboah also highlighted the fact that if the issues of power get out of hand the country’s ability to be competitive in the era of the Africa Continental Free Trade Agreement will be affected.

“I mean we are talking industrialization and we are talking of business growth and now we even have a huge opportunity and a huge challenge at the same time under the Africa Continental Free Trade Agreement. It’s a huge opportunity because you have a big market out there that you can export to, and on the other hand it’s a huge challenge because huge products can get onto the market and compete with you. If you are not competitive on electricity tariffs and on reliability and consistency in the supply of electricity you are in trouble. You will be competed out, so in this time and age you just don’t talk of shutting down, whatever it will take to resolve them, let’s resolve it.”

Threats of shutdown

On July 8, the Independent Power Producers IPPs, which currently supply about 1,500 megawatts of electricity threatened to shut down their plants if PDS fails to settle debts amounting to over $700 million within eight working days.
The IPPs in question were Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited.

The Energy Minister, John Peter Amewu was later directed by the government to engage the IPPs threatening to shut down their plants over debts owed them.