The Government of Ghana has successfully averted a potential nationwide power crisis by reaching a debt settlement agreement with Sunon Asogli Power (Ghana) Limited.
Following a shutdown notice issued by the independent power producer (IPP) on December 4, 2023, the government committed to an interim payment of $60 million to be paid in two equal installments of $30 million. This emergency intervention led the company to suspend its plan to indefinitely shut down its 560-megawatt plant, which provides a critical portion of the country’s electricity.1
The scale of the financial challenge remains significant, as Sunon Asogli is owed in excess of $900 million. This debt consists of nearly $500 million in actual power consumption arrears and over $400 million linked to “take-or-pay” contract clauses.
The company’s Chairman, Qun Yang, highlighted the unsustainable nature of their operations, noting that the Electricity Company of Ghana (ECG) had only paid 24% of its monthly invoices between January and October 2023, causing the company’s receivable balance to swell by 76%.
The Ministry of Finance and ECG have characterized much of this debt as a “legacy issue” inherited from previous power purchase agreements. Finance Minister Ken Ofori-Atta has indicated that the state intends to renegotiate these contracts as part of a broader national debt sustainability strategy.
While this $60 million payment provides temporary relief, the broader Independent Power Producers (IPP) Ghana group, which controls half of the national generation mix, continues to press for the settlement of nearly $1.4 billion in total industry arrears to prevent future load shedding and ensure grid stability.
