Mahama Vows to Resolve IPP Debt Crisis

Accra, Ghana - 13 Jan, 2025 - Ghana's President John Dramani Mahama has held emergency talks with Independent Power Producers (IPPs) to prevent a looming power crisis.

The meeting, which took place on Monday, January 13, 2025, aimed to address the financial disputes plaguing Ghana's energy sector, particularly the government's $1.2 billion debt to IPPs.

The outstanding debt has put a significant strain on IPPs, which provide crucial electricity to the national grid. Repeated threats from IPPs to halt power production have escalated concerns about a potential energy crisis. President Mahama's meeting with IPPs is seen as a critical step towards resolving the financial challenges facing Ghana's energy sector.

President John Mahama has pledged to tackle the challenges facing Ghana's power sector, particularly the debts owed to Independent Power Producers (IPPs).

Mahama emphasized the need to address challenges in the entire power value chain, from downstream to upstream. He also acknowledged the importance of settling the debts owed to IPPs, which have accumulated due to mismanagement of funds generated through the Energy Sector Levy Act (ESLA).

“It is important for me to meet with you as the President. I care about your concerns and what you are going through, and I want to assure you that we will work together to resolve the issues within our power sector,” he said.

The President added that the primary focus should be addressing challenges in the value chain, stating, “The first priority for us is to tackle the issue of the value chain— the entire power value chain. This means we must start from the downstream all the way to the upstream.”

“Unfortunately, ESLA was not used for its intended purpose, and the revenues were mismanaged. What should have gone towards paying off the debt was used for other purposes, which has led to the current situation,” Mahama lamented.

Ghana's power sector has faced significant challenges in recent years, including frequent power outages and a reliance on thermal power plants. The West African Gas Pipeline Company's (WAPCo) recent announcement that it would shut down operations for scheduled maintenance further increased the risk of power shortages. However, the shutdown was postponed for two weeks, providing temporary relief.

Source: Lead News Online