IES Urges Gov’t to Avoid Debt Accumulation in Energy Sector

The Institute of Energy Security, IES, has advised government to put in place measures to ensure that it does not accumulate debt in the energy sector.

The Institute says it is important for government to adhere to its own guidelines in order not to repeat that the past situation the energy sector was in.

The comments come after the Energy Ministry announced that government has paid all the debt it owed the Electricity Company of Ghana up to December 2019, with a credit balance of 500 million cedis to cover bills up to April this year.

“The temptation to go back to where they were, where government owed ECG is high. We think that ECG can now apply the prepaid system into government institutions, the municipal assemblies and all the ministries may need to be hooked on the prepaid system so as not to accumulate additional debt as we go forward”, the Executive Director of the Institute of Energy, Nana Amoasi VII said.

Speaking in an interview, Nana Amoasi VII also commended government for clearing the debt but asked for consistency.

“To hear that government has paid its debt to ECG, thereby fulfilling its own commitment that they failed to do over the years is refreshing news” he stated.

Government clears all arrears of electricity bills for 2019

Energy Minister, John Peter Amewu earlier this week disclosed that government has paid all its outstanding debt owed to the Electricity Company of Ghana, ECG, for the year 2019. According to him, an amount of GH¢2 billion has been paid annually to the power distribution company towards covering the debt.

Speaking at the Minister’s press briefing on Tuesday, May 19, 2020, the Energy Minister explained government currently has a credit balance of GH¢500 million to pay for electricity bills for January to April 2020.

“Today at the end of 2019, all government bills with the ECG has been paid with a credit balance of GH¢500 million with ECG. With an average bill payment of about GH¢100 million, the credit balance of about GH¢500 million is enough and more than enough to pay for governments bills from January to April 2020,” Peter Amewu stated.

“It is also interesting to note that an unreconciled additional payment of GH¢4.14 billion has also been made to various small suppliers of power producers which is yet to be credited government under the ongoing Power Reconciliation Exercise,” he added.

The Minister added that, should the Power Reconciliation Exercise be completed, government will be in a conformable position to inform viable consumers of electricity that the energy sector is gradually moving out of debt.

The Energy Minister, however, argued that since the Akufo-Addo led administration’s assumption of office in 2017, the energy sector was confronted with huge indebtedness of GH¢2.63 billion owed to the ECG under by the Former President John Dramani Mahama when he left office in 2016.