Juba power company in forex standoff with gov't, threatens to switch off power
Ezra Construction and Development Group (ECDG), which generates and supplies Juba city with electricity, yesterday said in a statement that it will cease operating its power plant in the next few days because the government of South Sudan has failed to make overdue payments in United States Dollars as agreed.
“Ezra Construction and Development Group (ECDG), hereby gives notice that the Juba power plant will cease to operate in the next few days. On 31 March 2021, the company had notified Hon. Peter Marcello Nasir Jelenge, Minister of Energy and Dams, that it would be forced to take this drastic action unless the government of the Republic of South Sudan urgently made the US Dollar payment as set out in the PPA agreement signed on 16 August 2017,” the ECDG statement read.
“It is to be remembered that Ezra Construction and Development Group (ECDG) has built and is operating a power plant for the national grid of South Sudan. Ezra has made an extensive investment by the end of 2019 to make available over 230,000,000 kWh by the end of 2020. Over 64,000,000 kWh was consumed in 2020 alone by over 20,000 customers marking a successful inaugural year,” it added.
Ezra produces bulk energy supplied to Juba Electric Distribution Company (JEDCO), which in turn distributes electricity to customers in Juba, who pay in South Sudanese Pounds. The Government, through both the Ministry of Energy and Dams and the Ministry of Finance and Economic Planning, is contractually obliged to convert the SSP received by JEDCO into US Dollars to pay Ezra for the electricity it generates.
“Despite ensuring the collection of electricity tariff which is made in SSP through our joint efforts in JEDCO from customers, payments due to Ezra as per the contract signed in August 2017 have not been made on time despite numerous attempts to address the situation,” the company said. “ECDG has continued to supply electricity despite continued failure to make contractually required US Dollar payments.”
ECDG says it had extended the operation of the power plant despite the excessive delinquent amount with the explicit promise that $3million will be transferred every month by the central bank both in person, in the presence of different stakeholders, and also publicly on the Juba Monitor dated 23rd of January 2021.
“Ezra power plant is built with capital expenditure from investors and loans from financiers. The company had managed to secure a one-year grace period from investors, which expired in January 2021. Ezra now faces additional US Dollar costs, both for fuel and related products required to run the power plant purchases, and capital expenditure obligations from building and maintaining the plant,” the company said. “At this moment in time, the Ministry of Energy and Dams has failed to make over 85% of payments over the last 15 months. Some of the payments have been delayed for over 400 days.”
The electrical company said most of the power plant’s production inputs are imported and tied to Foreign Exchange.
Meanwhile, the African Development Bank Group, which funded the USD 38 million expansion and rehabilitation of the electricity distribution network in Juba, yesterday said in a press release that it was not involved in any decision-making regarding the planned power shedding in Juba.
“This statement is to inform the general public that the African Development Bank Group is not involved in any decision-making regarding power shedding in Juba, South Sudan’s capital city. The African Development Bank Group wishes to clarify that the Bank has played no direct role in power generation in Juba and is not involved in any matters concerning the operation and maintenance of the electricity distribution networks in South Sudan,” the statement from the bank reads in part.
The Bank funded the USD 38 million expansion and rehabilitation of the electricity distribution network in Juba. The project was primarily financed through a grant. It was implemented by the South Sudan Electricity Corporation, which is the power utility created by the Government. The Corporation falls under South Sudan’s Ministry of Energy and Dams.