Lights Out, Bills Due: Ghana’s $379M Gamble with Karpowership Sparks Dumsor Déjà Vu

Editorial Summary: Ghana’s energy sector is teetering on the edge as Karpowership threatens to pull the plug over a staggering $379 million debt owed by the Electricity Company of Ghana (ECG). With a seven-day ultimatum on the table, the specter of ‘dumsor‘ looms large, threatening to plunge industries, businesses, and households into darkness. As reported by Accra Street Journal, the government faces mounting pressure to settle its dues and avert a nationwide blackout that could derail economic stability and investor confidence

Detailed News: To avert widescale blackouts across the country, the Minister for Energy and Green Transition, John Abu Jinapor says his outfit will meet with Finance Minister Dr. Cassiel Ato Forson on May 2, 2025 to discuss avenues for a partial settlement of Karpowership‘s US$371 million arrears.

The Turkish power producer has formally notified the government it will halt operations within seven days unless its debt is addressed, a move that could severely disrupt key industries.

Karpowership supplies a significant share of Ghana’s electricity, and its shutdown would compound sector liabilities now exceeding GHS 80 billion. Independent power producers collectively claim more than US$1.7 billion, including US$297 million owed to Asogli Power and US$423 million to SEND Power. These legacy obligations stem from years of underfunding, weak tariff adjustments and deferred payments.

In recent months, Ghana has drawn down its World Bank guarantee from US$500 million to US$50 million and invoked a US$170 million Litasco-backed oil agreement to offset critical debts. “We have even allowed creditors to lift our oil to recoup debts,” Minister Jinapor noted. “This is not sustainable.”

The Minister stressed the need for longer-term solutions, including a proposed US$700 million gas processing plant to reduce dependence on costly thermal power and stabilize supply. He outlined a two-year roadmap to clear infrastructure backlogs and streamline contract management for IPPs.

In a bid to restore stability and efficiency to the power sector, the government has outlined a two-year roadmap aimed at clearing longstanding infrastructure backlogs. Pre-commissioning delays are expected, but the Minister expressed confidence that substantial progress will be made within the timeline.

“We’ve completed the committee work. Now, we move to implementation. Our timeline is two years, and we believe we can turn the corner.” He added.

`The threat of power outages could have a devastating ripple effect across Ghana’s economy. Key sectors such as manufacturing, telecoms, mining, and banking could experience operational disruptions, while investor confidence may take a hit if the crisis is not managed with urgency and transparency.

Last Updated on May 2, 2025 by samboad