Ghana’s power sector is on the brink of a crisis as Karpowership, the operator of the Aboadze power barge, threatens to shut down its generation plant over an outstanding debt of $370 million owed by the Electricity Company of Ghana (ECG).
The debt, which has been accumulating over time, has had a dire consequence on the operations of the Turkish power generation entity.
The threat was issued during a meeting between the Minister of Energy and Green Transitions, John Abdulai Jinapor, and officials of the Karpowership barge at the ministry in Accra.
Karpowership, which currently produces about 450 megawatts of electricity to the national grid, emphasized the importance of settling the debt immediately to avoid a shutdown.
The company’s representatives acknowledged the negative impact a shutdown would have on the livelihood and general well-being of Ghanaians but stated that they were left with no choice.
“Should the Electricity Company of Ghana (ECG), for that matter the government, fail to respect the terms of the Power Purchasing Agreement (PPA) and make payment to the Karpowership; we would be left with no choice but to shut down our plant as we cannot continue to be saddled with huge debts,” warned Zeynep Harezi Yilmaz, the Chief Commercial Officer (CCO) of Karpowership.
The Minister, John Jinapor, emphasized the importance of Karpowership to the country’s power sector and gave the assurance that the government would immediately establish a payment plan to settle the outstanding debts owed Karpowership.
“We will prioritise making the required payments to ensure the continuous operation of the power generation company and engage in open and transparent communication with Karpowership,” he stated.
The threat of shutdown is taking place in a period when the West African Gas Pipeline Company (WAPCo), the operator of the West African Gas Pipeline, has shut down its pipeline for routine maintenance.
The process has cut gas supply significantly from Nigeria through to Ghana, except for an average of about 90,000 million standard cubic feet per day (mmscf/d) of gas required to push the Pipeline Inspection Gauge from Nigeria to Aboadze which is being received by Volta River Authority plants at Shama.
Although the government has procured some alternative fuel, it will take a couple of weeks for cleaning them up for use in the thermal plants.
The country’s only best bet in such situations until gas supply resumes is the use of expensive diesel fuel. If Karpowership follows through with its threat, Ghana could face prolonged power outages, disrupting industries, businesses, and households.
The debt owed to Karpowership is part of the country’s ballooning energy sector liabilities, which have now surpassed $3billion.
However, the International Monetary Fund (IMF) has repeatedly flagged Ghana’s energy debt as a critical risk and urged sweeping reforms to prevent the sector from collapsing under mounting financial strain.
-BY Issah Olegor
