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Business News for Sunday, February 14, 2021
Source: bloomberg.com
02/14/2021
Dr. Matthew Opoku Prempeh, candidate for Minister of Energy
Ghana’s energy sector debt could multiply by more than four to $ 12.5 billion by 2023, unless concrete steps are taken to control it.
Debt continues to grow because the power distribution company can’t collect all the money for the power it sells, said the government’s candidate for energy minister, Dr. Matthew Opoku Prempeh, during a background check by lawmakers on February 12 and posted on the parliament website.
Debt owed to fuel suppliers and power producers was estimated at $ 2.7 billion in January 2019, the ministry said in its report on the energy sector recovery program. That was after the government introduced the sale of energy bonds in 2017 to help pay off debt.
“We are not raising enough revenue to meet our requirements,” Prempeh said. “We’re going to sit down with all the players and make them understand that if we don’t change and agree on some parameters, we will all collapse.”
Prempeh said that if confirmed for the position, he will seek relief through the ongoing renegotiation of power contracts with private power producers and will consider a different approach to privatizing the state power distribution company, Electricity Company of Ghana Ltd. Try to do it in 2019 until a US-funded aid program failed.
Since the renegotiation of the energy agreements began in 2019, three of the 12 independent producers agreed to take steps to cut their rates charged to the government, however, none agreed to stop charging the government for the energy they do not consume. Those obligations, under the so-called take-or-pay clauses, cost the government $ 500 million each year.
In an effort to solve an energy crisis between 2013 and 2015, Ghana awarded lucrative contracts to private producers to install power plants, bringing supply to more than 4,600 megawatts, well above the national peak demand of 2,700 megawatts.
