Power of the president to appoint an IGP per the 1992 Constitution of Ghana
Blackout Looms: Early Power, N-Gas Threaten to Cut Supply Over ECG & VRA’s Unpaid Debts
Blackout Looms: Early Power, N-Gas Threaten to Cut Supply Over ECG & VRA’s Unpaid Debts
By: Nii Ammui Fio | 2 mins read
Ghana faces a looming power crisis as two major energy suppliers, Early Power and N-Gas Limited, have threatened to halt electricity and gas supply over unpaid debts owed by the Electricity Company of Ghana (ECG) and the Volta River Authority (VRA), respectively.
Early Power has issued a stern warning to ECG, demanding the immediate settlement of an outstanding debt of $48,215,405.89, of which $47,249,898.93 is overdue. In a letter addressed to ECG’s Acting Managing Director on Friday, February 28, 2025, the power supplier expressed frustration over ECG’s persistent failure to meet its financial obligations.
“As a result of ECG’s default in payment, the Seller finds itself in a precarious financial position and will not be able to meet its debt service obligations and operating costs,” the letter stated.
The company has set February 28, 2025, as the deadline for ECG to clear the overdue amount, warning that failure to comply would force them to take drastic action, including invoking clauses in the Power Purchase Agreement (PPA) and the Power Compact Operations Agreement (PCOA) to suspend supply.
Meanwhile, N-Gas Limited has also notified the Volta River Authority (VRA) of its decision to cut gas supply to Ghana effective March 6, 2025, due to unpaid arrears exceeding $75 million.
In a letter addressed to VRA’s Managing Director on Tuesday, February 18, 2025, N-Gas revealed that despite multiple commitments from VRA, no payments had been made. The company stated that it had continued to supply gas even though it had been unable to pay its own gas suppliers and transporters since November 2024, putting the entire energy value chain at risk.
"However, VRA’s action could soon result in gas supply and transportation reliability issues," the letter warned.
According to N-Gas, VRA failed to honor a promised payment of $25 million by February 21, 2025, and has not met stipulated conditions, constituting a breach of the Takoradi Gas Sales Agreement (TGSA).
Citing specific clauses in the agreement, N-Gas stated that it would remove the stay order on the Standby Letter of Credit (SBLC) and call on it by Monday, February 18, 2025. Additionally, effective March 6, 2025, the company will cease gas supply to VRA, as allowed under Clause 13.6(a) of the TGSA, which permits suspension of supply in case of non-payment.
To maintain contractual integrity across the energy sector, N-Gas is now considering demanding one month of pre-payment from VRA before resuming gas supply.
With both Early Power and N-Gas threatening to halt supply, Ghana’s energy security is now at serious risk. The VRA, which depends on N-Gas to fuel thermal power plants, could be forced to explore alternative sources to avoid power shortages. If a resolution is not found soon, the country may face widespread blackouts, further straining businesses and households already grappling with power instability.
Ghana's public debt amounts to a staggering GHS721 billion, with several state-owned enterprises also being in debt, including the ECG, which owes GHS68 billion.
