The Minister for Energy and Green Transition,John Jinapor has sounded the alarm, warning that Ghana’s power crisis is poised to intensify as Karpowership, a major power supplier, threatens to shut down operations within a week due to substantial unpaid bills. This development has sent shockwaves through the energy sector, which is already grappling with significant challenges.
According to him, the government’s inherited debt in the energy sector stands at a staggering $1.7 billion, with notable arrears owed to prominent energy players such as Karpowership, Asogli Power, and SEND Power. “Yesterday, I received a letter from Karpowership, and they have threatened to shut down the plant in seven days due to the unpaid bills we inherited, he revealed.
He elaborated on the magnitude of the debt, stating that it encompasses $297 million owed to Asogli, $220 million to SNIT, $423 million to SEND Power, and $371 million to Karpowership. “When you add them all together, the total debt inherited amounts to $1.7 billion,” he noted. Despite efforts to negotiate with Karpowership for a temporary reprieve, the company has remained resolute in its decision to shut down if the debts are not settled.
He also highlighted the growing financial strain on the sector, with the total debt now exceeding GH₵80 billion. He cautioned that if the crisis is not addressed promptly, the country’s power sector could collapse entirely. In a bid to mitigate the situation, the government has initiated negotiations with the Ministry of Finance to secure emergency funds and has made partial payments to some energy suppliers.
”We have paid approximately $30 million. Karpowership has been made a priority, and we have also paid some outstanding amounts to WAPCo,” he explained.
However, the financial strain has compelled Ghana to tap into international guarantees meant to secure the energy sector.
”The World Bank guarantee of $500 million has now been reduced to $50 million,” the Minister disclosed.
He revealed that Ghana has been forced to sell oil reserves, originally intended to generate revenue for the economy, to repay the mounting debts.
”The Litasco guarantee, which was about $170 million, has also been drawn down. The oil that would have been sold to generate revenue for the economy had to be taken to repay the debt,” he confirmed.
In light of the crisis, he emphasized the urgent need for a new gas processing plant, estimated to cost $700 million, to stabilize the energy sector.
”We need this gas processing plant like yesterday. We will fund it with domestic resources, and every discerning Ghanaian should support this initiative,” he urged.
Looking ahead, He assured that the government is working to clear the infrastructure backlog within the next two years. Despite the significant challenges ahead, he expressed confidence that the government can overcome them.
”We’ve completed the first quarter of the year, and we now have a full understanding of the challenges we face. To settle these debts, we have to use our oil. It’s a service that someone paid for, and to pay it off, we have no choice but to use what we have,” he concluded.
By Lawrence Odoom
