Sunon Asogli Resumes Operations Amid Financial Resolution Efforts

Sunon Asogli Power (Ghana) Limited has resumed operations of its 560MW power plant after a shutdown in October 2024 due to financial constraints. This development follows the intervention of Finance Minister Mohammed Amin Adam and Energy Minister Herbert Krapa, who facilitated the release of emergency funds to address the company’s challenges.

The plant’s closure stemmed from the Electricity Company of Ghana’s (ECG) failure to settle overdue payments, which left Sunon Asogli unable to maintain operations. As of September 2024, the company reported a net receivable of $259 million (excluding fuel costs) owed by ECG. Despite withholding charges for idle capacity, Sunon Asogli disclosed that the debt increased by 23% between January and September 2024, with only 22.6% of invoices settled through the Cash Waterfall Mechanism during that period.

In a statement on Monday, Sunon Asogli announced that it had submitted the final version of a Restructuring Terms Sheet to the Ministry of Finance and ECG in August 2024 for approval. The company expressed optimism that this agreement would pave the way for a "win-win solution," ensuring energy stability and reliability in Ghana.

“We hope that the ECG can adhere to the spirit of the contract and diligently honour their financial obligations in the Power Purchase Agreement (PPA),” the statement read. Sunon Asogli also commended Vice President Dr. Mahamudu Bawumia for his significant role in expediting payments, which contributed to the restoration of the plant’s operations.

The resumption of activities at the 560MW facility marks a crucial step in stabilizing Ghana’s energy sector. The plant, a key contributor to the national grid, had its shutdown spark concerns about energy supply shortages and financial mismanagement in the energy value chain.

Sunon Asogli remains committed to engaging stakeholders to resolve longstanding payment issues while sustaining its operations. The company also reiterated its focus on promoting reliable and efficient energy generation, emphasizing its dedication to fulfilling its contractual obligations under the PPA.

The government’s intervention highlights the critical importance of maintaining financial discipline within the energy sector. Stakeholders are hopeful that the ongoing restructuring and collaborative efforts will lead to a more sustainable model for managing energy sector finances, averting future disruptions to power supply.

As the plant resumes operations, attention now shifts to the finalization of the Restructuring Terms Sheet and the long-term commitment of ECG to meeting its financial obligations. This will be essential to ensuring the stability and growth of Ghana’s energy infrastructure.