The Electricity Company of Ghana (ECG) has attributed its worsening debt situation to the instability of the forex market and the depreciation of the cedi.

This revelation comes amid a deepening energy crisis, with nine Independent Power Producers (IPPs) owed $1.7 billion for the power they generate and supply to the national grid.

Speaking on Joy News’ Newsfile on Saturday, November 23, the acting Managing Director (MD) of ECG, Ing. Asamoah David, explained that forex challenges significantly contribute to the company’s debt accumulation.

“The truth is that the majority of these debts are a result of a forex shortfall,” he stated. “Each month, just from forex, we lose about 37 million. So, if you get the money and pay, getting the dollars becomes a problem. Sometimes, you will even make a payment, and it will take days or weeks before the IPPs receive it because of the dollar.”

Ing. Asamoah further clarified the role of currency conversion in the delays, saying, “If it were in cedis, I would pay. But now, when I pay the money, the banks have to get the dollars and convert them before they pay the IPPs, and by the time they pay, if the dollar increases, it means we still have a shortfall.”

As of November 22, the Bank of Ghana reported that the dollar was selling at a little less than GHC16 and the pound selling a little less than GHC20.

Despite these challenges, the MD assured the public that ECG is making efforts to address the payments issue. “So, for the payments, we are doing our best to pay. We have an agreement with them now on how it’s going to be paid. ECG will pay part, and the Ministry will come in. Just yesterday [Friday], they sent me a message saying they have agreed.”

The energy sector’s troubles escalated when Sunon Asogli, Ghana’s largest IPP, completely shut down operations on October 8 due to a $259 million debt. Dr. Elikplim Kwabla Apetorgbor, CEO of the Chamber of Independent Power Producers, Distributors, and Bulk Consumers (CIPDiB), warned of further shutdowns if no intervention occurs.

“I can confirm that all is not well. If there is no intervention before Friday [November 22], I can tell you that by Monday, three key power plants will be off the grid. It is a serious matter, not fun,” he cautioned.

The financial strain has also affected the operations of other IPPs, which supplement power generated by the state-owned Akosombo plant. However, with a new payment agreement in place, Ing. Asamoah revealed that the IPPs have agreed to resume smooth operations, and Sunon Asogli is expected to resume production in the coming weeks.

Other IPPs that had scaled down their power output will also increase their supply. The unresolved debt crisis continues to threaten the stability of Ghana’s national grid, with urgent measures needed to avert widespread power outages.