Finance Minister, Dr. Mohammed Amin Adam says the government is expected to sign debt restructuring agreements with the Independent Power Producers (IPPs) in the next three weeks aimed at clearing outstanding debts in the energy sector.

The minister addressing the press, explained that clearing the energy sector debts remains a priority for the government as additionally, the state was putting measures in place not only to address the debts but to prevent the accumulation of future debts

“The energy sector continues to be a bother for us because the arrears are still huge on our books. We’ve seen significant progress in addressing not just the arrears but to prevent the accumulation of arrears going forward,” he responded to a question on the status of the energy sector arrears.

Explaining further, he indicated that the energy sector negotiated with some IPPs and is to sign an agreement with them in two to three weeks.

“Coming to the existing arrears, we are almost through with our negotiation with the IPPs to restructure the arrears over several years and as I speak to you, I believe in the next two to three weeks we’ll be signing those agreements with the IPPs we have concluded negotiation with.”, he disclosed.

“We have even started showing our good faith to the IPPs by making some payments that we had agreed to do with them and this is why you do not hear the threats that you used to hear and read about from IPPs about threatening to shut down,” he added.

The ministry, he noted has also initiated a revised cash waterfall mechanism to guarantee that payments are made to the IPPs and to state-owned enterprises with support from the Ministry of Finance

Dr. Amin Adam also expressed optimism and emphasized that strict implementation of the cash waterfall mechanism will help address the perennial issue of accumulation of energy sector debts.

“We are very confident that the effective implementation of the cash waterfall will help in preventing the accumulation of new arrears and so we are very confident that the signing of this document will pave the way for spreading the arrears over several years, an average of five years to provide some relief to us to put our house in order to ensure that we do not go back to the days of huge arrears in the energy sector”, he concluded.