Ghana’s electricity supply is under threat as independent power producer Early Power has warned of a potential shutdown due to the Electricity Company of Ghana’s (ECG) failure to clear an outstanding debt of $48,215,405.89.

In a letter addressed to ECG’s Acting Managing Director on Friday, February 28, 2025, Early Power expressed deep concern over ECG’s failure to honor its financial obligations, noting that $47,249,898.93 of the total amount was already overdue.

The letter, which was copied to the Minister for Finance, the Minister for Energy, the Executive Secretary of the Public Utilities Regulatory Commission (PURC), and the Board Chairman, stressed the severe financial strain ECG’s default has placed on the company.

"As a result of ECG’s default in payment, the Seller finds itself in a precarious financial position and will not be able to meet its debt service obligations and operating costs," Early Power stated.

The company has set February 28, 2025, as the deadline for ECG to settle the overdue amount. Failure to meet this deadline, Early Power warned, would compel it to activate provisions under the Power Purchase Agreement (PPA) and the Power Compact Operations Agreement (PCOA), which could result in the suspension of electricity supply.

Meanwhile, Ghana’s energy sector is facing another crisis as N-Gas Limited has formally notified the Volta River Authority (VRA) of its decision to halt gas supply to Ghana by March 6, 2025, due to unpaid arrears exceeding $75 million.

In a letter to VRA’s Managing Director on Tuesday, February 18, N-Gas expressed frustration over the continuous delays in payment despite previous assurances. The company highlighted the ripple effect on its own operations, as it has been unable to pay its gas suppliers and transporters since November 2024 due to the mounting debt.

"However, VRA’s action could soon result in gas supply and transportation reliability issues," the letter stated.

N-Gas noted that VRA had failed to make a committed $25 million payment by February 21, 2025, nor had it met the stipulated conditions precedent, thereby violating the Takoradi Gas Sales Agreement (TGSA).

Citing specific clauses in the contract, N-Gas outlined its intended course of action:

"Remove the stay order on the SBLC call and proceed with calling on the Letter of Credit by Monday, 18 February 2025, and effective 6 March 2025, N-Gas shall cease further gas supply to VRA, in accordance with Clause 13.6(a) of the Takoradi Gas Sales Agreement, which provides for the cessation of gas supply in the event of non-fulfillment of payment obligations by Buyer."

To safeguard contractual agreements across the energy value chain, N-Gas has indicated it may require VRA to make one month of pre-payment before restoring supply.

These developments raise serious concerns over Ghana’s energy security, as the potential suspension of gas supply could significantly affect power generation. With VRA depending on gas from N-Gas to fuel thermal power plants, the country may be forced to explore alternative energy sources to prevent widespread electricity disruptions.