Negotiations between the government and Independent Power Producers (IPPs) are underway to restructure energy sector debts, with the cumulative invoice on debts owed to IPPs projected to reach $450 million by year-end if talks fail to progress.
Currently, the government is engaged in discussions with IPPs to restructure debts totaling $1.46 billion. While progress has been made in nearing a deal, IPPs are insisting on a bulk down payment of legacy debts before finalizing the terms of restructuring.
Despite reaching win-win terms, the deal remains unsigned due to preconditions yet to be met by the government. A key precondition demanded by the Independent Power Producers, is a bulk down payment of legacy debts.
The delay in finalizing the deal is concerning, as the remaining 30% of invoices, unpaid since July 2023, continues to accumulate as additional debt. Sources within the Independent Power Producers suggest that this accumulation could reach $450 million by year-end if negotiations prolong.
The accumulation of debt may prompt the Independent Power Producers to consider cutting power supply to recoup losses. Initially, the government aimed to conclude discussions by March but is now targeting the end of May to finalize negotiations.
