Karpower Ghana Limited, the second-largest independent power producer in Ghana, has issued a warning that it may suspend electricity generation if the Electricity Company of Ghana (ECG) fails to settle an outstanding debt of $379 million.

The company, which operates a 470 MW powership at Aboadze in the Western Region, raised concerns about the mounting arrears during a meeting with the new Minister for Energy and Green Transition, John Abdulai Jinapor, last Monday.

During the meeting, Karpower officials cautioned that they would be unable to sustain operations unless the debt was cleared immediately.

In response, Minister Jinapor appealed to the company for patience while the new administration explored alternative measures to settle the outstanding payments.

The Ghanaian government has been urged not to underestimate the potential consequences of Karpower’s threat.

The company has a history of taking drastic measures in response to unpaid debts.

In January 2024, the Turkish firm behind Karpower suspended power supply to Freetown, Sierra Leone, over a $30 million debt, triggering a nationwide power crisis that led to the resignation of the country’s Energy Minister, Alhaji Kanja Sesay.

Should Karpower Ghana follow suit, the country could face severe power rationing, plunging businesses and households into an energy crisis.

Ghana’s energy sector is grappling with a worsening financial crisis, with total debt surpassing $3 billion as of January 12, 2025.

The International Monetary Fund (IMF) has repeatedly raised concerns over the country’s growing energy debt, warning that without urgent and far-reaching reforms, the sector risks total collapse.

With the threat of power cuts looming, the government faces mounting pressure to act swiftly and resolve the financial challenges threatening the stability of Ghana’s electricity supply.