The Member of Parliament of Bolga Central, Mr Isaac Adongo, has taken a swipe at the government’s decision to borrow US$20 million to support the proposed Ghana Energy Sector Transformation Initiative (ESTI) project, describing it as a misplaced expenditure that will not add value to the energy sector.
He said the challenges confronting the country’s energy sector required more than seminars, workshops and consultancy, which the US$20 million-loan was expected to fund under the ESTI project.
The National Democratic Congress (NDC) MP expressed surprise at the government’s decision to borrow to fund such activities rather than investing in fuel purchase, improving distribution lines and expanding the energy mix, which he said were vital to improve the energy situation in the country.
The ESTI championed by the Ministry of Energy aims to develop a bankable investment plan by collecting the necessary information and lessons learnt from previous electrification projects and utilising geographical mappings to determine the limits of assembling grids.
It is also aimed at determining the cost of stand-alone off-grid and mini grid solutions and capacity building to provide technical skills in the area non-conventional technological systems.
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However, contributing to the debate on the US$20 million loan to support the project on the floor of Parliament, Mr Adongo said although he was not against the decision to borrow to address the challenges in the energy sector, he was against how the money would be used.
“The challenges of the energy sector as enumerated in the report require a lot more than just seminars, workshops, capacity building and consultancy.
“We know that some of the challenges identified are high cost of fuel used by thermal power plants; how will workshops and seminars solve this problem,” he asked.
Gas supply challenges
Mr Adongo said he wondered how capacity building and seminars were going to solve the gas supply challenges confronting the energy sector.
“We all know the challenge of our gas supply. All our oil fields are in the west and as a result, there is excess supply of gas in the west that must be evacuated to the east to power our plants.
“The previous administration was clear with what the solution was which was to either construct our gas pipeline from the west to the east or to negotiate with the West Africa Gas Pipeline to give us better tariffs in order to evacuate our gas,” he explained.
“So why do we have to spend another US$20 million on workshops and seminars on something that we already know what the solution is,” he noted.
He also indicated that the challenge of distribution losses could not be solved by consultancy and seminars but rather, a concrete and extensive investment to replace age-old distribution lines in order to improve efficiency.
“There was a roadmap that started by the previous administration. You will recall that we started the expansion and the retooling of the distribution lines right from Prestea to Kumasi and to build a bigger power station there.
“This was to continue all the way to Techiman to the kintampo area where another bigger power station would be built and further continue to Tamale and construct another bigger power station, then to Bolga.
“This was to improve the transmission across the lines and to make us capable of transporting excess power to our neighboring countries. So, the solution is certainly not workshops and seminars,” he reiterated.
Non-payment by gov’t entities
On the non-payments of debt owed by government entities, Mr Adongo said “I don’t see how US$20 million investment in capacity building will make the government pay its debt to the Electricity Company of Ghana (ECG).”
“We are told that consistently, the electricity sector revenue has fallen and as a result of this shortfall, the Volta River Authority (VRA) and other operators have incurred legacy debts,” he stated.
“We were in this house when the energy bond was approved. This bond was meant to address this situation Moreover, this particular transaction has been ring fenced under the ESLA arrangement so I don’t see why we will be approving another US$20 million for a transaction that is already ring fenced and a subject of the energy sector bond,” he pointed out.
“Clearly, there is no value in how this US$20 million will be spent.”