The acting Managing Director of the Electricity Company of Ghana (ECG), Ing. Asamoah David, has attributed the company’s debt challenges to fluctuations in the cedi-to-dollar exchange rate. In an interview on Joy News on November 23, Ing. Asamoah explained that the volatility of the local currency is complicating ECG’s ability to meet its financial obligations, particularly to Independent Power Producers (IPPs).

ECG currently owes millions of US dollars to nine IPPs. One of these producers, Sunon Asogli, shut down its operations in October due to a debt of $259 million, while other IPPs have also expressed concerns over delayed payments for the electricity they have supplied.

Ing. Asamoah clarified that the company could have settled its debts if payments had been made in cedis. However, as payments are made in dollars, fluctuations in the exchange rate mean that the company faces shortfalls when converting the cedi to the dollar.

“If it were in cedis, I would pay,” he said. “But now, when I pay the money, the banks have to get the dollars and convert them before paying the IPPs. By the time they pay, if the dollar increases, we still face a shortfall.”

He further disclosed that a new payment arrangement has been made, with the ECG and the Ministry of Energy sharing the responsibility of settling the debts. “We have an agreement now on how it’s going to be paid. ECG will pay part, and the Ministry will come in,” he added. “Just yesterday, they sent me a message saying they have agreed.”

Ing. Asamoah also assured that Sunon Asogli would resume operations in the coming weeks, and other IPPs that had scaled back their output would also increase their supply.

The IPPs play a crucial role in supporting Ghana’s electricity grid alongside the state-owned Akosombo plant.

Source:TheDotNews