Sunon Asogli Power (Ghana) Limited has resumed operations of its 560MW power plant after a successful intervention by Finance Minister Mohammed Amin Adam and Energy Minister Herbert Krapa. The ministers facilitated the release of emergency funding to address the company’s financial challenges, bringing relief to Ghana’s energy sector after weeks of uncertainty.
The power plant had been shut down in October 2024 due to the Electricity Company of Ghana’s (ECG) failure to settle overdue payments. This left Sunon Asogli unable to sustain operations, creating significant challenges for power supply in the country. As of September 2024, Sunon Asogli reported a net receivable of $259 million owed by ECG, excluding fuel costs.
The financial strain on the company was compounded by the growing debt, which increased by 23% between January and September 2024. Despite refraining from invoicing ECG for idle capacity, the company revealed that only 22.6% of invoices issued during the period were settled through the Cash Waterfall Mechanism.
In a statement issued on Monday, Sunon Asogli announced that they had submitted the final version of a Restructuring Terms Sheet to the Ministry of Finance and ECG in August for finalization and signing. The company expressed optimism that the agreement would provide a sustainable solution for Ghana’s energy sector.
“We are confident that a win-win solution that will ensure the stability and reliability of Ghana’s energy will be achieved,” the statement read. “We hope that the ECG can adhere to the spirit of the contract and diligently honour their financial obligations in the PPA.”
The company also commended Vice President Dr. Mahamudu Bawumia for his pivotal role in ensuring the payment of arrears, which facilitated the plant’s resumption of operations.
The resumption of the 560MW plant’s activities is a significant step toward stabilizing power supply in the country. It also addresses pressing concerns about financial sustainability in Ghana’s energy sector, as prolonged outages and financial mismanagement have historically affected both businesses and households.
Sunon Asogli’s operations are crucial to Ghana’s energy infrastructure. The plant has been a reliable source of power for years, helping to meet the growing demand for electricity across the country. However, the recent financial challenges highlighted the fragility of the sector and underscored the need for more robust mechanisms to ensure timely payments and resource management.
The intervention by the Finance and Energy Ministries sends a strong signal about the government’s commitment to supporting the energy sector. The ministers’ collaborative efforts demonstrate the importance of a proactive approach to resolving challenges that could disrupt critical services.
Sunon Asogli’s leadership emphasized the importance of financial discipline and accountability in ensuring the long-term sustainability of the energy sector. The company reiterated its commitment to working with all stakeholders, including the government and ECG, to implement measures that would prevent similar occurrences in the future.
With the power plant back in operation, attention now shifts to the finalization of the Restructuring Terms Sheet and the implementation of strategies to prevent recurring debt issues. Stakeholders are optimistic that the lessons learned from this crisis will lead to reforms that enhance efficiency and reliability in the sector.
The resumption of operations marks a new chapter for Sunon Asogli and Ghana’s energy sector. It is a testament to the resilience and determination of key stakeholders who worked tirelessly to find a solution under challenging circumstances. The success of this intervention offers hope for more collaborative efforts to address systemic issues and ensure uninterrupted power supply for all Ghanaians.
As the situation progresses, it is expected that ECG will honour its financial obligations as stipulated in the Power Purchase Agreement (PPA). The adherence to contractual terms and the establishment of sustainable financial practices will be pivotal in maintaining stability in the sector.
The timely intervention by the Finance and Energy Ministers, combined with the support of Vice President Bawumia, has brought relief to the energy sector and restored confidence in the government’s ability to address critical challenges. This outcome not only stabilizes power supply but also strengthens the foundation for future growth and development in Ghana’s energy landscape.
Sunon Asogli’s resumption of operations is a crucial milestone in ensuring reliable power supply for businesses and households across the country. It underscores the importance of effective collaboration, financial discipline, and commitment to shared goals in overcoming challenges and building a resilient energy sector.
