Independent Power Producer Ezra Construction and Development Group (ECDG) has issued a notice for the closure of its Juba Power Plant, a 33MW diesel fuel-fired thermal power station that supplies electricity to South Sudan’s capital city. ECDG provided a formal notice to H.E. Peter Marcello Nasir Jelenge, Minister of Energy and Dams, South Sudan, on 31 March 2021, stipulating that the company would be forced to halt operations unless the U.S. dollar payments owed by the Ministry are made.
ECDG currently holds a Power Purchase Agreement with the government of the Republic of South Sudan – signed in August 2017 – in which the state-owned electricity company, Juba Electric Distribution Company (JEDCO), is contractually obliged to pay for purchased electricity in U.S. dollars. The Ministry of Energy and Dams has failed to make approximately 85% of the payments owed over the last 15 months, with payments failing to be made on time.
The Juba Power Plant, a major electricity supplier for the country, was developed with capital expenditure provided by investors and financier loans in which a one-year grace period has allowed the company to delay re-payments. However, this period ended in January 2021, resulting in an urgency to receive JEDCO’s owed foreign currency. In addition to foreign currency needed for loan paybacks, ECDG relies on production input imports. Accordingly, the situation has emphasized the need for alternative fuel sources, in which the development of domestic supplies and refineries can address these challenges, as well as reduce the need for the dependency on foreign currency.