The Juba power plant could be making headway to a total shutdown amid drastic inflation which has made it almost impossible for the government to convert power levy from residents to sufficient USD required by Ezra Construction and Development Group (ECDG) to maintain the facility.

In a statement released by the Ministry of Energy and Dams, the government is unable to convert electricity fee levied on consumers within the city amid volatile exchange rate.

“The main points of the contract included in the Power Purchase Agreement (PPA) and Implementation Agreement (AI) explicitly stipulated that the Central Bank of South Sudan has to US Dollars to the investor by converting the SSP collected from the consumers to pay back ECDG for the bulk energy it supplies by the approved price of US$0.373/kw,” read part of the statement.

“However, currently the above-mentioned conversion of SSP at the approved USD rate cannot be implemented due to a number of challenges facing the Central Bank of South Sudan. The MED is now appealing for patience as it urgently engages with all stakeholders in an effort to find a long-term solution,” it added.

This comes after Ezra started scheduled load shedding, which is currently affecting businesses and livelihoods around Juba.

The ministry says it was “very concerned” with the power-supply problems plaguing the capital, Juba and “regrets” how the power interruption is affecting residents and businesses, and acknowledges failures in respect of the contractual obligations towards Ezra due to “various factors”.

Before issuing the contract to the construction of the Juba power plant, the ministry the South Sudanese government sought an investor to first build a power plant to serve the Juba area, and then expand to other parts of the country.

In response, scores of investors showed interest. Due to a lack of sovereign guarantee from the Government of South Sudan, the ministry claims, they were unable to proceed.

“As the Ezra Group has a long history of investing in South Sudan, the Ministry invited the company to discuss investing in the power sector. As a result, ECDG agreed to take on the contract without requiring a sovereign guarantee,” the statement further said.

“The MED requested and received the go-ahead from the Government’s technical loan committee. The cabinet approved the MED request and passed a resolution on 28 July 2017, paving the way for the construction of a power plant to serve Juba residents,” it added.