Revenue mobilisation drive - Govt throws weight behind ECG - Move necessary for defraying debt owed by power generators
The government has declared its unflinching support to the Electricity Company of Ghana (ECG) to meet its financial obligations to power generators, including independent power producers (IPPs) for sustainable power supply in the country.
A Deputy Minister of Energy, Herbert Krapah, who gave the assurance in an interview with journalists on the margins of the launch of the 10th anniversary of the Electrical Wiring Programme (EWP) by the Energy Commission in Accra yesterday, said the current focus was to support the company to retrieve its tariff arrears of over GH¢5.7 billion owed by power consumers.
“The first step is to help ECG recoup what is out there.
That is one of the ways to help the company defray some of the debts and make it sustainable.
We have a mechanism to ensure that what is received is distributed fairly and equitable to all the players including the private entities,” he stated.
Mr Krapa said the current revenue mobilisation drive by ECG was a step in the right direction as it would make the public utility company more resourceful to enable it to meet its commitments.
“The revenue mobilisation drive by ECG has the full support of the government.
Before ECG rolled out the programme, the minister of energy, his deputies and the leadership of the Ministry met with ECG and finalised the modalities for implementation.
The ECG has the fullest backing of the government,” he added.
He said it was important that ECG sustained the revenue mobilisation drive, adding that “this must not be a nine-day wonder.”
ECG, the main power distributor in the country, is saddled with huge debts owed to power generators including the Volta River Authority (VRA), the Bui Power Authority (BPA) and Independent Power Producers (IPPs).
It owes nine IPPs, which controls about 50 per cent of the country’s electricity generation mix, about $1.4 billion as of February this year.
The Chief Executive Officer (CEO) of the Independent Power Generators, Ghana (IPGG), Dr Elikplim Apetorgbor, told the Daily Graphic in March this year that the debt had virtually crippled the operations of the nine IPPs.
“If the ECG does not pay up part of the debt owed our members, they cannot guarantee continuous production of power for the next two weeks. The situation is so dire that something urgent must be done,” he said.
With regard to BPA, it is estimated that the power distributor owed it over $600 million.
This came to light at the Public Accounts Committee (PAC) of Parliament earlier this year.
According to the Auditor General’s report, the ECG owed the BPA $386 million as of the end of December 31, 2019, which increased to $614, 373,274.36 by the end of 2022.
In the 2020 Auditor-General’s report, it was estimated that ECG, Ghana Grid Company (GRIDCo) and Volta Aluminium Company (VALCO) owed VRA about GH¢4.7 billion, which represented about 72 per cent of the power generator’s balance sheet.
As part of efforts to shore up its finances to meet its financial obligations, ECG embarked on a massive revenue mobilisation exercise to recover unpaid bills amounting to GH¢5.7 billion from its customers.
The exercise, which started from March 20, this year and is expected to end on April 20, has seen ECG visiting many government and private entities to retrieve the money.
Entities that failed to pay substantial amount of the unpaid bills and negotiate payment schedule were cut off from the national grid by the power distributor.
"The target is 100 per cent and the plan is to get everyone who owes to pay, so we are not leaving anyone out, not even my home, if it is found out that I owe," the Managing Director of ECG, Samuel Dubik Mahama, told the Daily Graphic in an interview ahead of the exercise.
Let’s help ECG
Mr Krapah said it was imperative that all stakeholders, including power consumers, honoured their obligations and help ECG succeed.
The ECG, he said, played a crucial role in the power sector and ultimately the socio-economic development of the country and, therefore, there was the need to make the company viable and sustainable.
“The efficiency of the power and energy sector is anchored on ECG working effectively and efficiently.
We expect power in our homes and work places. We all feel the unpleasant effects of not having power.
We must, therefore, develop the culture of paying for the power that we use,” he added.