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Dumsor tiptoes as power producer shuts down plant

October 17, 2024
in Headline, News
“Is dumsor back?”
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Ghana may be on the brink of another power crisis, commonly referred to as “dumsor,” as Sunon Asogli Power (Ghana) Limited has shut down its 560MW power plant due to the Electricity Company of Ghana’s (ECG) inability to settle its debts. As of the end of September 2024, Sunon Asogli reported that ECG owes a staggering $259 million, excluding fuel costs, severely affecting the company’s ability to fund its operations.

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In an official statement on October 16, 2024, Sunon Asogli highlighted that despite refraining from invoicing ECG for idle capacity charges, the company’s debt has ballooned by 23% between January and September 2024. Alarmingly, only 22.6% of the invoices over this period were settled through the Cash Waterfall Mechanism, further worsening the situation.

“Sunon Asogli Power (Ghana) has over the years been very considerate in its dealings with ECG and the government, and unlike other independent power producers, has not even invoiced ECG for accrued idle capacity charges,” the statement read. “Despite this, ECG owes Sunon Asogli a net (excluding fuel) receivable amount of $259 million as of the end of September 2024.”

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The shutdown, which could severely impact the national power supply, comes as the latest chapter in the ongoing financial strain between ECG and independent power producers (IPPs). Sunon Asogli, which has played a critical role in Ghana’s energy sector, expressed regret over the potential disruption but noted that it had no alternative but to halt operations.

The power producer has called on the Ministry of Finance to step in and facilitate a swift resolution. A settlement would allow Sunon Asogli to resume operations and prevent an escalation of the power shortages across the country.

As concerns grow about the possibility of prolonged power outages, the shutdown highlights the ongoing financial challenges in Ghana’s energy sector, with ECG struggling to meet its financial obligations to IPPs. Without immediate intervention, the country could face another round of rolling blackouts, disrupting businesses and daily life.

Sunon Asogli’s shutdown serves as a reminder of the fragile state of Ghana’s power sector, where financial mismanagement and delays in settling debts can lead to nationwide disruptions. The government’s ability to address this issue promptly will be crucial in averting a full-blown energy crisis in the coming weeks.

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