IPPs warn of $1.8 billion debt surge amid PURC's electricity tariff cuts

Independent Power Producers Ghana (IPPs) have issued a stark warning about the worsening challenges in Ghana's power sector.

The IPPs anticipate a potential increase in debt of around USD$1.8 billion by the end of 2024, primarily due to the Public Utilities Regulatory Commission's recent decision to further decrease electricity tariffs.

While aimed at providing relief to consumers,

Read full articlethis move is expected to escalate financial strains on IPPs due to rising variable costs of electricity production. The IPPs express concern that tariff reductions haven't been accompanied by decreases in production costs, leading to significant financial deficits.

High transmission and distribution losses further exacerbate the sector's inefficiencies. These challenges echo past experiences in 2018, which significantly strained the Electricity Company of Ghana's (ECG) financial sustainability.

Despite commitments, ECG continues to accumulate debt to IPPs, raising concerns about future obligations and potential default risks.