Finance Minister, Dr Mohammed Amin Adam, has sharply criticised the management of Sunon Asogli Power Plant Limited for acting in “bad faith” by shutting down its 560-megawatt production plant over an unresolved debt with the Electricity Company of Ghana (ECG).
The power plant, a critical component of Ghana’s energy infrastructure, ceased operations due to ECG’s outstanding debt of US$259 million, raising concerns of a potential return to “dumsor”—intermittent power outages—which could severely impact the country’s economy.
Addressing the issue at the end of the Annual IMF-World Bank Meetings in Washington, D C, Dr Amin Adam assured the public that government efforts to resolve the matter are in progress, and a resolution is expected within days.
“Asogli submitted the final agreement for our review. We reviewed it and are fine with it except for one issue which led to the shutdown,” Dr Amin Adam said.
“So when the Ministry of Finance made the one-off payment to all the IPPs, we were supposed to pay Asogli US$30 million and subsequently, they made a case for another US$30 million but we did not agree to that, so we finalised the negotiations with them on the arrears.”
He clarified that ECG spearheaded negotiations, with the agreement including a payment of US$30 million to Sunon Asogli. However, the process encountered hurdles when the company demanded an additional US$30 million beyond the agreed terms, threatening to shut down operations if the payment was not made.
“ECG actually led the negotiations and as part of the settlement, ECG wanted us to pay the US$30 million. ECG made a case for which we didn’t agree, so I had meetings with Asogli and we agreed that we would pay, but we wanted them to sign the settlement agreement because this is one of the terms of the agreement and they said no, we should pay before they sign. But if it is part of the settlement agreement, why should I implement an agreement that has not been signed?” Dr Amin Adam added.
The minister further explained that despite these negotiations, Sunon Asogli subsequently raised its demand to US$60 million and threatened to maintain its shutdown until the full amount was paid.
“So we communicated this to ourselves only for Asogli to come to say they no longer wanted US$30 million but they wanted US$60 million and that if we don’t pay them, they will shut down,” he added.
“So, it will be as if we as a country, we don’t know our rights especially when an election is closer. Everybody thinks that when I put a gun on the head of government by going ahead to shut down, they acted in bad faith.”
The Ministry of Finance expects to finalise the debt settlement agreement soon to avert further disruptions, hoping to restore stability to Ghana’s power sector and avoid economic setbacks associated with power shortages.
Reporting By Jonathan Ofori, Asaase Newsroom
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