TIG Post

Tag: Energy sector

  • Energy sector has become a ticking time bomb – Ato Forson

    Energy sector has become a ticking time bomb – Ato Forson

    Finance Minister Dr. Cassiel Ato Forson has sounded the alarm over Ghana’s energy sector, describing it as a “ticking time bomb” due to non-cost reflective tariffs and unsustainable energy subsidies.

    Speaking at the first session of the two-day National Economic Dialogue at the Accra International Conference Centre, Dr. Forson warned that the sector’s financial deficits could exceed nine billion dollars by 2026 despite government interventions.

    “The energy sector in Ghana has become a ticking time bomb. More than two per cent of GDP every year. Every year, the profits of the energy sector will probably fall back on the legal side. For citizens, we require radical measures,” he said.

    He pointed to the Electricity Company of Ghana (ECG) as a major concern, citing massive distribution and collection inefficiencies that worsen the sector’s financial struggles.

    “Currently, only 62 per cent of total energy purchase by ECG is collected, leaving out probably 62 per cent. 65 per cent of that amount is used to pay for supplies through the cash quarter for mechanism,” Dr. Forson stated.

    “Unfortunately, 35 per cent of ECG’s revenue is used to take care of ECG themselves over times that they don’t actually work,” he added.

    Dr. Forson lamented the impact of non-cost reflective tariffs, arguing that they fail to cover the actual cost of service provision.

    “In most reflective tariffs, about 50 per cent of cost of service provision is not for us to expect. However, I still maintain that tariffs should not be used to reward ECG’s inefficiencies and other inefficiencies in the system,” he emphasized.

    He disclosed that unpaid legacy arrears in the energy sector had reached $1.3 billion by the end of 2022, with annual cumulative shortfalls climbing to $2.2 billion in 2024, despite significant government funding.

    According to Dr. Forson, the sector’s crisis is fueled by political reluctance to implement cost-reflective tariffs, limited renewable energy adoption, and ECG’s operational inefficiencies.

    “Having generational costs due to lack of politicians and limited renewable capacity in the energy mix is a problem. Having distribution and collection losses at ECG is also a problem,” he stated.

    He urged a comprehensive reform strategy that addresses inefficiencies, promotes renewable energy, and ensures sustainable tariff policies to avert further financial instability.

    Without immediate action, Dr. Forson warned, the worsening financial crisis in the energy sector could pose a severe threat to Ghana’s overall economic stability.

  • Ghana’s energy sector debt stands at GHC70bn – Mahama

    Ghana’s energy sector debt stands at GHC70bn – Mahama

    President John Dramani Mahama has disclosed that Ghana’s energy sector is grappling with an overwhelming debt burden of GH¢70 billion, despite the collection of billions in energy sector levies over the past eight years.

    Delivering his first State of the Nation Address (SONA) on Thursday, February 27, 2025, Mahama expressed concern over the dire financial state of state-owned enterprises in the energy sector, warning that many could collapse without urgent intervention.

    *”Despite collecting over GHC45 million in energy sector levies (ESLA) over the last 8 years, the outgoing administration has left the Ghanaian people with an energy sector burdened with a staggering debt of GHC70 billion as of December 2024.

    “It is of deep concern that several State-Owned Enterprises in the energy sector are struggling to stay afloat, and unless urgent interventions are made, many of them would go under,”* he stated.

    Mahama further highlighted that maintenance of the West African Gas Pipeline—originally scheduled for 2024—had been deferred to 2025, increasing the risk of power shortages. To prevent widespread blackouts, his administration had secured emergency fuel supplies to sustain electricity generation until the maintenance is completed in March.

    “We expect a marked improvement in the power situation once the pipeline is back in operation, allowing additional gas flow from Nigeria,” he assured.

    To prevent future crises, Mahama directed the Minister for Energy and Green Transitions to roll out key reforms, including:

    • Creating a single revenue collection account to eliminate financial leakages.
    • Strictly enforcing the cash waterfall mechanism to ensure a structured approach to debt repayment.
    • Reducing wasteful spending across state-owned utilities.

    He also announced plans to deepen private sector participation in metering and billing, citing the success of a partnership between the Electricity Company of Ghana (ECG) and Enclave Power Limited.

    “This model, which has achieved 99% revenue collection and near-uninterrupted power supply, provides a practical solution for improving efficiency,” Mahama noted.

    President Mahama expressed confidence that these measures would not only stabilize the energy sector but also guarantee a reliable and affordable power supply for Ghanaians.

    “This is not just about resolving today’s challenges—it is about creating a resilient and sustainable energy sector that drives national development,” he emphasized.

  • Energy crisis is a national emergency that demands decisive and lasting solutions – CDM to govt

    Energy crisis is a national emergency that demands decisive and lasting solutions – CDM to govt

    The Centre for Democratic Movement (CDM) has called on the government to take urgent and concrete steps to resolve Ghana’s worsening energy crisis, describing the situation as a national emergency requiring decisive action.

    The organisation criticised what it sees as the government’s reactive approach to the crisis, arguing that delays and ineffective strategies have left citizens and businesses struggling with unreliable power supply. CDM insisted that leadership must demonstrate competence in addressing the country’s pressing energy needs.

    “This is not a political debate; it is a national emergency that demands decisive and lasting solutions,” the organisation stated, emphasizing the need for immediate intervention to stabilise the energy sector.

    While acknowledging past failures by the opposition National Democratic Congress (NDC) in managing the sector, CDM urged political leaders to move beyond blame games and focus on sustainable solutions that will guarantee reliable electricity for Ghanaians.

    According to the movement, the government must stop making excuses and take full responsibility for the current state of affairs. It stressed that only bold, transparent, and forward-thinking policies can restore stability and prevent further disruptions in the sector.

    “The time for political rhetoric is over; Ghanaians need action now,” CDM declared, calling for a clear and actionable roadmap to address the crisis.

    The group also urged policymakers to prioritise long-term energy security over short-term political interests, warning that continued policy failures would have dire consequences for both businesses and ordinary citizens.

    Reaffirming its commitment to holding leadership accountable, CDM vowed to continue advocating for sustainable solutions that will ensure affordable and reliable power supply for all.

  • Govt’s approach will create a resilient and reliable energy ecosystem – IPGG

    Govt’s approach will create a resilient and reliable energy ecosystem – IPGG

    The Independent Power Generators (IPGG) has expressed confidence that the government’s energy strategy will lead to a resilient and reliable energy ecosystem for Ghana.

    In a statement signed by its Chief Executive Officer, Elikplim Apetorgbor, the IPGG emphasized its readiness to collaborate with the Energy Minister-designate, John Abdulai Jinapor, to advance sustainable energy generation, promote renewable sources, and address financial and policy challenges in the sector.

    “We believe that Mr. Jinapor’s pragmatic approach and expertise will contribute significantly to the creation of a resilient and reliable energy ecosystem for Ghana,” the statement noted.

    During his vetting before Parliament’s Appointments Committee on January 13, Mr. Jinapor outlined his goal to establish a framework for private sector involvement in the operations of the Electricity Company of Ghana (ECG) by the end of 2025. He highlighted transparency and expert participation as key pillars of this initiative.

    “We believe there should be private sector participation. What we intend to do is to form a seven-member committee, comprising technical experts, legal minds, financial analysts, industry players, and even a consumer representative,” he explained.

    The committee will explore global best practices to determine whether a concession model or full privatization would be more appropriate for ECG’s operations. Mr. Jinapor assured the committee that the process would be free from political interference and based on openness and transparency.

    “My target is to push for six months, but I do not want to stampede the committee. However, give or take, within this year, we should complete the framework,” he added.

    The IPGG also acknowledged Mr. Jinapor’s extensive experience in Ghana’s energy sector and his focus on innovation, sustainability, and efficiency, as demonstrated during his vetting process.

    “As a critical stakeholder in the energy industry, we are confident his leadership will bring a renewed focus and drive toward addressing the challenges confronting the power sector,” the statement concluded.

    The IPGG congratulated John Abdulai Jinapor and reaffirmed its commitment to supporting his vision for Ghana’s energy future.

  • Ghana’s energy sector debt stands at $3bn – John Jinapor

    Ghana’s energy sector debt stands at $3bn – John Jinapor

    Energy Minister-designate John Jinapor has revealed that Ghana’s energy sector debt has surged to $3 billion, citing ineffective management and increasing interest on existing liabilities.

    During his vetting before Parliament’s Appointments Committee on Monday, January 13, Mr. Jinapor provided a detailed account of the sector’s financial challenges. He noted that as of August 31, 2017, the total energy sector liability was GH₵9.4 billion, which, based on an exchange rate of 4.4, amounted to $2.1 billion.

    “When we were leaving office, the debt stock consolidated was close to 2 billion. Fortunately, I have a document summary of energy sector debts and lenders through August 31, 2017. The ESLA PLC got a full audit of the entire energy sector debts. I refer to page 17 of the document. The total energy sector liability at the time was GH₵9.4 billion, they themselves use an exchange rate of 4.4. If you use this exchange rate of 4.4, the debt had then moved to $2.1 billion. So let me put on record that as at this time when the debt was validated, the debt was $2.1 billion,” he stated.

    He dismissed claims that the debt had reached $5 billion, emphasizing that official public records validated by Parliament confirmed the debt stood at $2.1 billion at the time.

    Mr. Jinapor, who chaired the energy subcommittee of the transition team, further disclosed that as of September 30, 2024, the debt had risen to $2.5 billion. A subsequent reconciliation meeting involving the Ministry of Energy, the Energy Commission, and the Electricity Company of Ghana (ECG) confirmed a further increase to $3 billion.

    “As we speak today, the reconciled figure from official sources is $3 billion,” he emphasized.

    He also referenced the Energy Sector Levies Act (ESLA), which had generated approximately GH₵45 billion over the years. He noted that while these funds had been used to service parts of both the principal and interest on the debt, they remained insufficient to curb the sector’s rising liabilities.

    https://twitter.com/JoyNewsOnTV/status/1878844628583227513

  • Ghana to renegotiate with US for reinstatement of $190 million for energy sector

    Ghana to renegotiate with US for reinstatement of $190 million for energy sector

    Ghana is set to reopen negotiations with the United States government for the possible reinstatement of $190 million under the Millennium Challenge Corporation (MCC) Compact, previously allocated for the country’s energy sector.

    President John Dramani Mahama revealed this during a courtesy call by Mr. Ousmane Diagana, the World Bank Vice President for West and Central Africa, in Accra. Mr. Diagana was in Ghana to attend the presidential inauguration held on January 7 at Independence Square.

    President Mahama emphasized the importance of reforming Ghana’s energy sector to improve efficiency and reduce debts. He highlighted the need to revisit the MCC agreement to achieve these goals.

    He recalled his role during his tenure as Vice President under the late President Professor John Evans Atta Mills, when he signed the MCC on behalf of the President, with the aim of transforming Ghana into the most efficient electricity producer in Africa and a major hub for electricity exports.

    “Unfortunately, democracy has its dividends, but it also sometimes can be a curse. We left the government, and a new government took over the Millennium Challenge Compact. The last segment, which was providing efficiency in distribution, billing, metering, and all that, was taken over,” President Mahama said.

    He further referenced the Power Distribution Services (PDS) debacle, adding, “PDS is history now. But we want to look at that again because if we do not fix the Electricity Company of Ghana, we will continue to have a major problem with our whole power value chain.”

    President Mahama reaffirmed his administration’s commitment to improving the sector through private sector participation. “Going ahead with privatizing the last point of distribution of electricity to bring in private sector efficiency is something that we want to take up again,” he stated.

    The President disclosed that discussions with US officials and the Millennium Challenge Corporation had been positive, stating, “I spoke to the Americans and met the Millennium Challenge Corporation, and we asked if they could reinstate the $190 million that they had devoted to that aspect of it. And they said the door is not closed.”

    He stressed the importance of following up on the discussions, saying, “We need to pursue that discussion. Or, if we don’t have access to the $190 million, if the World Bank can support us to be able to finish that aspect of it, we can reduce the losses where it has to do with the independent power producers (IPPs).”

    In the interim, President Mahama noted his administration’s commitment to restoring transparency and stabilizing the energy sector through measures such as the cash waterfall mechanism.

    Mr. Ousmane Diagana reaffirmed the World Bank’s continued support for Ghana’s socioeconomic development agenda, emphasizing the importance of collaboration for the country’s progress.

  • Mismanagement of gov’t revenues fueling energy sector challenges – Ablakwa

    Mismanagement of gov’t revenues fueling energy sector challenges – Ablakwa

    The Member of Parliament (MP) for North Tongu, Samuel Okudzeto Ablakwa, has attributed the ongoing power supply challenges to the mismanagement of public funds by the governing New Patriotic Party (NPP).

    According to Mr. Ablakwa, the government’s failure to settle debts owed to Independent Power Generators (IPGs)—key contributors to the nation’s electricity supply—has exacerbated the energy crisis. He revealed that these producers, who complement the state-owned Akosombo Dam, are owed substantial sums, leading to disruptions in power distribution.

    “We have a real problem at hand. I have been in talks with independent power generators, and the government owes them $1.6 billion in monthly invoices. If you look at what is at the PPA [Public Procurement Authority], it is over $2 billion, and that is frightening. The government negotiates with them, promising to pay over a four-year period. Even so, the negotiations they had with them since last year have not been honoured,” Mr. Ablakwa said on Joy FM’s Super Morning Show on Thursday, November 21.

    The North Tongu legislator criticized the government’s handling of public finances, highlighting contracts and projects that he described as dubious and wasteful. He suggested that funds used for questionable deals could have been allocated to settle debts owed to IPGs, thereby averting the current crisis.

    “The crisis we face now is due to the mismanagement of the economy, where our resources have been squandered on dubious deals. $12 million for Pwalugu, and we can’t find it; $12 million for the Agyapa deal, they can’t explain; $2.5 million for the Skytrain, and we can’t find the money; $2 million paid for Sputnik V, and we can’t find it; over $58 million for the National Cathedral, we can’t find it; the DRIP project, which has been inflated by over $100 million – that’s all they are doing with our money. If these resources, which have been directed towards corruption, had been used to pay these IPPs, we wouldn’t be in the situation we are in now,” he lamented.

    Mr. Ablakwa urged the government to “stop the corruption and pay the independent power generators,” stressing that the nation’s energy crisis could have been avoided if public funds had been judiciously utilized.

    He also criticized the current administration for failing to sustain the gains made in the energy sector during John Mahama’s presidency, emphasizing that the next National Democratic Congress (NDC) government would inherit these debts.

    The Asogli Power Plant, one of the IPPs, has already shut down due to unpaid invoices, disrupting power distribution. Reports indicate that two more power producers have threatened to cease operations if the government fails to clear its debts, raising fears of further power outages in the coming days.

  • Ghana signs $260m deal with World Bank to resolve energy sector crisis

    Ghana signs $260m deal with World Bank to resolve energy sector crisis

    Ghana has signed a significant US$260 million deal with the World Bank aimed at addressing the US$1.2 billion losses and various inefficiencies plaguing its energy sector.

    This agreement, part of the Energy Sector Recovery Programme, includes a US$250 million credit for a metering procurement package and a US$10 million clean cooking grant component, in line with the Bank’s Programme for Results (PforR) initiative.

    As part of the agreement, the World Bank will facilitate the procurement of one million meters through competitive bidding, with the clean cooking component receiving an advance of 20 percent of the financing requirement initially. The initiative is tied to specific targets, such as optimizing energy generation transmission, ensuring transparency in the Cash Waterfall Mechanism, and significantly reducing revenue collection losses for the Electricity Company of Ghana (ECG).

    The deal is expected to drastically decrease the country’s metering gap and integrate new meters into the billing system, thereby improving commercial loss. Speaking at the signing event, Dr. Mohammed Amin Adam, Finance Minister, emphasized the government’s commitment to enhancing efficiency in the energy sector and increasing financial viability by adopting innovative approaches. He urged the ECG to eliminate high electricity distribution losses and improve collection rates, which have caused the government to spend approximately GHS18 billion (US$1.2 billion) in financing energy sector shortfalls in 2024 alone.

    “The cash waterfall mechanism must be adhered to… and we won’t compromise,” he stated, directing the ECG to ensure that all collections are funneled back into the system and redistributed to beneficiaries to build confidence in the investor community.

    Mr. Asjish Khanna, Protective Manager for West and Central Africa Energy at the World Bank, noted that the financing arrangement would yield better results due to its performance-based structure. “This is better because rather than releasing money without achieving the results, this format of financing ensures that money is disbursed only after the achievement of results,” he explained.

    He further added, “We are asking ECG’s financial accounts audited to be disclosed annually at a particular time every year; once they disclose it in year one, a certain amount of money would be released.” Additionally, he emphasized that since everyone acknowledges that ECG’s collection and losses are not optimal, there is a target for reducing those losses, and funds will be released based on the level of reduction achieved each year.

    Mr. Khanna concluded that these measures are designed to ensure Ghanaians receive accurate meter readings while the ECG reduces its fiscal drain, stating, “Efficiency in ECG means better service to people.”

  • Energy sector decline threatens industrial growth despite 8.2% surge

    Energy sector decline threatens industrial growth despite 8.2% surge

    Ghana’s industrial sector recorded notable growth in the second quarter (Q2) of 2024, posting an 8.2% year-on-year (YoY) increase, according to the Ghana Statistical Service’s (GSS) latest Index of Industrial Production (IIP). 

    However, persistent challenges in the energy sector cast a shadow over the strong performance, raising concerns about the long-term sustainability of industrial growth.

    The surge in industrial output was primarily driven by significant expansions in the mining, quarrying, and manufacturing sub-sectors. Mining and quarrying grew by 8.2%, contributing over half (53.26%) of the total industrial output. 

    Manufacturing also recorded an 8.3% growth, demonstrating resilience despite sectoral challenges. Nevertheless, a decline in energy production, particularly in the electricity and gas sub-sector, threatens to undermine the sector’s continued momentum.

    The mining and quarrying sub-sector has been a key driver of industrial growth, accounting for the largest share of output. Year-on-year, the sub-sector grew by 8.2%, with notable contributions from the mining of metal ores, which surged by 12.1%, and other mining and quarrying activities, which saw a 24.8% rise in production. 

    Global demand for minerals like gold and manganese is expected to remain strong, offering a positive outlook for further growth in the sector.

    While the crude petroleum and natural gas segment recorded modest growth of 4.7% year-on-year, it experienced a 4.4% quarter-on-quarter decline, reflecting volatility in global energy markets.

    The manufacturing sector also posted strong results, growing by 8.3% year-on-year. The basic metals sub-sector saw a remarkable 18.5% increase in production, while the manufacture of transport equipment grew by 20.9% over the same period. 

    However, performance across manufacturing was mixed, with food production experiencing a significant 12.3% quarterly decline. This drop was attributed to ongoing supply chain disruptions and high input costs.

    Despite the positive growth in mining and manufacturing, the energy sector continued to struggle. The electricity and gas sub-sector declined by 1.4% year-on-year and recorded a 4.3% quarter-on-quarter drop. Ongoing issues in electricity and gas supply have sparked concerns about the sector’s ability to support sustained industrial activity.

    Energy remains a critical input for industrial production, and the continued decline in output from the sector poses a threat to growth prospects in the second half of the year.

    The water supply, sewage, and waste management sub-sector saw modest growth of 1.2% year-on-year, with quarterly output increasing by 2.8%. However, waste collection and disposal services recorded a 4.8% decline over the quarter, signalling inefficiencies in waste management services.

    Ghana’s industrial sector showed promising signs of recovery in Q2 2024, but the underlying weakness in the energy sector raises critical concerns. As industrial growth is largely driven by mining and manufacturing, sustained energy shortages could dampen these gains and limit the sector’s full potential.

  • Proposed merger in the energy sector not a solution – VRA Union

    Proposed merger in the energy sector not a solution – VRA Union

    National Union Chairman of the Public Services Workers Union at the Volta River Authority (VRA), Fuseini Adjei, has expressed concerns over the proposed merger of power producers and distributors, stating it would not benefit the nation’s energy sector.

    The government is planning to introduce a bill to combine power producers and distributors, but this has sparked widespread opposition from workers in the energy sector.

    The bill seeks to merge the Bui Power Authority (BPA), NEDCo, and the Electricity Company of Ghana (ECG) into one entity.

    However, Mr. Adjei, speaking to the Ghana News Agency in Sunyani, argued that merging the power producers and distributors would not effectively address the country’s power challenges.

    Earlier, NEDCo staff staged a peaceful protest to express their dissatisfaction with the proposed bill.

    Mr. Adjei emphasized that it is crucial for the government to engage with stakeholders in the power sector thoroughly in order to find proper solutions to the issues in the energy industry.

    He said any move to privatise the nation’s power sector too would lead to increased power costs, saying “private entities always prioritise profit over public service”.

    Mr Adjei pointed out that currently the VRA was selling power at a reasonable price due to the Authority’s social contract and cautioned against measures that could “harm” the sector and thereby benefit private entities.

    He urged the government to involve stakeholders in the bill’s drafting process to incorporate their expertise as well.

    In a related interview, Mr Prince Mash-hud Abdulai, the Vice President of the NEDCo Senior Staff Association noted that, “At this stage of our operations, a merger is not the solution.”

    Instead, he urged the government to supply the essential resources and financial backing to energy sector participants, emphasizing that this support is vital for them to serve the public effectively and efficiently.

    Mr Abdulai said if proper care were not taken the power sector could fall into the “hands of the private sector” and that would allow private companies to “dictate prices and use of power which may not be in the best interest of the people.

  • Liabilities in cocoa and energy sectors could affect Ghana’s “modest recovery” – World Bank

    Liabilities in cocoa and energy sectors could affect Ghana’s “modest recovery” – World Bank

    The World Bank’s latest Ghana Economic Update indicates that while the country has made “steady progress” towards economic stabilization, significant liabilities in the cocoa and energy sectors could pose risks to Ghana’s “modest recovery.”

    Released on Monday, July 22, the eighth edition of the report attributes the recent economic improvement to a firm monetary policy stance, comprehensive debt restructuring, and a series of structural reforms aimed at supporting long-term growth.

    Despite this, the report points out that challenges such as financial sector stress and contingent liabilities in critical sectors like cocoa and energy could impact the economy’s stability.

    Mr. Stefano Curto, Lead Economist for Ghana, Liberia, and Sierra Leone at the World Bank, noted that the macroeconomic situation has seen considerable improvement over the past year.

    “Growth in 2023 was more resilient than projected, reaching 2.9 percent. Ghana has made commendable strides on fiscal consolidation,” Curto stated.

    However, he emphasized that the sustainability of these efforts is contingent on enhancing the country’s tax revenue while minimizing the impact on growth and the vulnerable populations.

    The report stresses the need for robust measures to enhance tax revenue mobilization and the full implementation of policies related to the ongoing $3 billion International Monetary Fund (IMF) loan-support program.

    Mr. Curto recommended streamlining the complexities associated with personal income tax, Value Added Tax (VAT), excise duty, and corporate income tax, as well as rationalizing tax exemptions.

    Economist Mr. Kwabena Gyan Kwakye projected a 3.1 percent growth for Ghana by the end of 2024, with the potential for economic growth to reach 5 percent by 2025 if stabilization efforts are fully implemented. He also called for continued efforts in expenditure management to sustain economic progress.

    Dr. Alex Ampaabeng, Deputy Finance Minister, acknowledged the challenges in the country’s tax administration system but assured that reforms were underway to enhance domestic revenue mobilization.

    He highlighted the National Revenue Policy and a medium-term revenue strategy designed to adapt to the evolving business landscape.

    Dr. Ampaabeng mentioned that the Ministry of Finance is collaborating with the Ghana Revenue Authority (GRA) on data cleansing to better identify and engage taxpayers. Currently, Ghana’s database includes approximately 7.4 million taxpayers, with 1.9 million active and 5.4 million inactive.

  • It is time to appoint a new leader for energy sector – IES director

    It is time to appoint a new leader for energy sector – IES director

    Executive Director of the Institute for Energy Security (IES), has voiced concerns over the lack of effective leadership in the energy sector.

    He emphasized that the sector’s issues are not being properly addressed due to the absence of a capable leader.

    During an appearance on Citi FM’s Eyewitness News on Monday, April 22, 2024, Nana Amoasi VII highlighted the apparent lack of guidance within the energy sector.

    He called upon the government to urgently replace the current Minister of Energy, Dr. Matthew Opoku Prempeh, with someone more efficient and effective in tackling the sector’s challenges.

    “Today the power sector or the energy sector appears shepherdless. You don’t see a leader who is standing up to the issues, accepting them as they are and seeking to address them while calling for cooperation from Ghanaians,” the IES Executive Director stated.

    “Today it is very unfortunate, and I think it is time we have a new leader probably for the energy sector. But as we speak there is no shepherd….He [Energy Minister] must be relieved to concentrate on any agenda he is bidding for. He must be relieved of his post. It is becoming too much,” he stated.

    His statement follows the intermittent power supply, which is adversely affecting both individuals and businesses.

    “We have been asking for a timetable for quite a long time. The PURC intervened as an arbiter between the utilities and consumers and asking the ECG to provide one, unfortunately, the Minister of Energy [tells] all of us including the PURC to produce a timetable if we need one and why will we wish the country evil by asking for a load shedding timetable,” he bemoaned.

    It should be remembered that the Public Utilities Regulatory Commission instructed the Electricity Company of Ghana to provide a load management schedule by April 2, 2024.

    Amid increasing worries regarding the persistent power interruptions nationwide, some Ghanaians urged the power distribution company to publish a load-shedding timetable, but their calls went unanswered.

    ECG’s administration insisted that the power cuts were due to technical issues, and no formal load-shedding plan would be enforced.

    In a letter dated Thursday, March 28, 2024, GRIDCo highlighted that ECG’s disregard for load management directives was a clear violation of its regulations and posed a significant risk to the power grid’s stability.

    Consequently, GRIDCo submitted a complaint against the Electricity Company of Ghana to the Minister of Energy, Dr. Matthew Opoku Prempeh, regarding the latter’s refusal to provide a load-shedding timetable amidst the intermittent power outages, commonly referred to as ‘dumsor’.

  • Audit reports on cash flow system in energy sector to be made public – Finance Minister-designate

    Audit reports on cash flow system in energy sector to be made public – Finance Minister-designate

    The Minister-designate for Finance, Dr Mohammed Amin Adam, has revealed the government’s intention to release audit results of the cash waterfall mechanism to improve transparency and accountability in Ghana’s energy sector.

    This decision comes at a crucial time as the sector grapples with substantial financial issues, including a debt of over one billion dollars owed to independent power producers.

    To tackle this mounting debt, the government introduced the cash waterfall mechanism in July 2017, with the goal of improving revenue collection and distribution.

    However, the mechanism has faced challenges in its effectiveness, underscoring the necessity for increased transparency and efforts to address implementation hurdles.

    Dr Mohammed Amin Adam emphasised the importance of the cash waterfall mechanism during the 2024 World Bank and IMF Spring meetings, stating that audit findings will be published to ensure transparency.

    “The cash waterfall mechanism is important because at least it ensures that there’s cash flow, every player in the value chain has some cash flow so that they can be able to meet their operational cost but it’s important to also state that we’ve had challenges implementing the cash waterfall mechanism as a result of which through collaboration with the World Bank, with the IMF, we have instituted some measures to make it effective.

    “One of the measures we have introduced is to audit the cash waterfall mechanism quarterly. But we have also been required to publish the audit findings.”

    Energy analyst Dr. Yussif Sulemana, on his part, noted that this will help tackle fiscal challenges in the sector.

    “I think it’s a step in the right direction for transparency. So if you notice the problem that we have, some of them are induced and that has made it multifaceted and that has made it difficult to disengage which you need to tackle, which you need to prioritise.”

  • We are looking at data to avoid propaganda – Atta Akyea on energy sector crisis

    We are looking at data to avoid propaganda – Atta Akyea on energy sector crisis

    Chairman of the Energy Committee of Parliament, Samuel Atta Akyea, has announced that the committee is prepared to investigate the cause of the recent intermittent power supply disruptions in the country.

    He emphasized that the committee will rely on data and facts, and will not entertain any attempts to politicize the issue of power outages.

    During an interview on JoyNews’ PM Express, Samuel Atta Akyea stated that key stakeholders in the energy sector will meet with parliament’s energy committee on Saturday, April 6, 2024, to discuss strategies for addressing the power supply challenges.

    “It is important to know that the Energy Committee wants to interrogate this matter critically… We looking at data which is apolitical so you cannot come and do propaganda with facts, it won’t work,” he stated.

    Samuel Atta Akyea further said, “If you do not have the power, you can’t conjure some propaganda and noise to bring the power. So you need to own up as to why we are having this challenge then those who are experts will look at it and say look, these are the obvious challenges…these are the solutions.”

    The Public Utilities Regulatory Commission (PURC), Electricity Company of Ghana (ECG), Volta River Authority (VRA), Chamber of Independent Power Producers, Ghana Grid Company Limited (GRIDCo), Energy Commission, and Minister of Energy, Dr. Matthew Opoku Prempeh, along with his technical team, are expected to participate in the meeting on Saturday.

    This development follows the Public Utilities Regulatory Commission’s directive to the Electricity Company of Ghana (ECG) to provide a load management timetable by April 2, 2024.

    Amidst growing concerns over persistent power cuts nationwide, some Ghanaians have called for ECG to release a load-shedding timetable. However, ECG’s management has maintained that the power outages are due to technical challenges and that no formal load-shedding schedule will be implemented.

    In response to public outcry, the PURC issued a directive on March 18, instructing ECG to publish a load-shedding timetable by April 2, 2024. This move aims to provide clarity and transparency regarding the power supply challenges faced by consumers.

  • Major stakeholders to hold crunch meeting on Saturday over energy sector crisis

    Major stakeholders to hold crunch meeting on Saturday over energy sector crisis

    All major stakeholders in the energy sector are scheduled to appear before Parliament’s Energy Committee this Saturday, April 6, as announced by the Committee’s Chairman, Samuel Atta Akyea.

    In an interview on JoyNews’ PM Express, Mr. Atta Akyea explained that the meeting was prompted by recent power outages, commonly referred to as ‘dumsor‘, experienced in various parts of the country.

    The gathering of key players in the energy sector, including representatives from Ghana Gas, the Public Utilities Regulatory Commission (PURC), the Electricity Company of Ghana (ECG), the Volta River Authority (VRA), the Chamber of Independent Power Producers, the Ghana Grid Company Limited (GRIDCo), the Energy Commission, and the Minister of Energy, Dr. Matthew Opoku Prempeh, accompanied by his technical team, aims to comprehensively address the current challenges in the energy value chain.

    Mr. Atta Akyea stressed the importance of evidence-based discussions over mere propaganda, highlighting the Committee’s commitment to identifying the root causes of the power outages and formulating effective solutions to resolve them.

    “It is important to know that the Energy Committee wants to interrogate this matter critically… You cannot do propaganda with facts. If you do not have the power, you can’t conjure noise to bring the power,” he said on Tuesday.

    The Chairman also highlighted the expertise and research conducted by committee members, expressing confidence that a collaborative effort among stakeholders would lead to tangible solutions.

    “You need to own up as to why we are having these challenges then those who are experts will say “These are the obvious challenges, and these are the solutions,” that is when we come back to normalcy and we can have enough electricity to export as we have done before.”

    Ghana has been dealing with inconsistent electricity supply recently, causing disruptions in various sectors and inconveniences for consumers.

  • Ghana’s economy to worsen due to energy sector debt – Minority

    Ghana’s economy to worsen due to energy sector debt – Minority

    The Minority Leader in Parliament, Dr. Cassiel Ato Forson, has raised serious concerns about the debt burden affecting Ghana’s energy sector, stating that it poses a significant threat to the country’s economy.

    Dr. Ato Forson warned that if left unaddressed, this debt could potentially lead to a complete collapse of the nation’s economy.

    Speaking after President Akufo-Addo’s 2024 State of the Nation Address on Monday, March 11, the leader of the NDC Caucus in Parliament emphasized the urgent need for action to prevent further deterioration in the situation.

    He expressed concern that the Ghanaian population is already suffering from the current economic crisis and cannot afford additional disruptions in the energy sector.

    “The reality, Mr Speaker, is that this crippling indebtedness and the mess in the power sector, created by the Akufo Addo/Bawumia government, remains the biggest threat to the Ghanaian economy,” he said.

    “This Akufo-Addo/Bawumia NPP government owes in excess of $1.5 billion to Independent Power Producers (IPPs),” he added.

    Dr. Ato Forson criticized the Akufo-Addo government for its mismanagement of the energy sector since assuming office in 2017.

    He highlighted the upcoming 2024 general elections as an opportunity for the National Democratic Congress (NDC) to address these issues and restore stability to the sector.

  • 15% VAT on electricity for energy sector debt settlement – Deputy Energy Minister

    15% VAT on electricity for energy sector debt settlement – Deputy Energy Minister


    The imposition of a 15 percent Value Added Tax (VAT) on electricity consumption has been justified by the government as a crucial component of its COVID-19 recovery initiative aimed at generating additional revenue.

    In a recent interview with Citi FM on Monday, January 15, Deputy Energy Minister Agyapa Mercer acknowledged the challenging nature of the decision but underscored its necessity in addressing debts owed to independent power producers.

    Mercer highlighted that the outstanding debt to independent power producers alone amounted to approximately GH¢1.7 billion as of July 2023.

    Despite this rationale, there is a growing chorus from the Minority and energy experts urging a reconsideration of the Value Added Tax imposed on specific categories of residential electricity consumers.

    Finance Minister Ken Ofori-Atta, in a letter to the Public Utility Regulatory Commission, clarified that the value-added levy would apply to electricity consumption exceeding lifeline units.

    The Ministry explained that this move is integral to the government’s broader COVID-19 recovery program.

  • Ghana’s plans for energy sector captured in new national policy

    The government has introduced a comprehensive National Energy Policy aimed at reshaping the country’s energy sector to support its economic development objectives.

    This extensive policy, which received cabinet approval earlier this year, encompasses various aspects of the energy sector, including power generation, transmission, distribution, petroleum, renewable energy, nuclear power, and energy efficiency.

    Key highlights of the new policy comprise:

    1. Universal Access to Electricity: The objective of achieving universal access to electricity by 2024 through an expansion of the national grid and the establishment of mini-grids. Presently, 86% of households have access to electricity.
    2. Renewable Energy Growth: A commitment to increasing the proportion of renewable energy sources to meet rising electricity demand in an environmentally sustainable manner. This includes the implementation of utility-scale solar and wind projects, as well as off-grid solutions.
    3. Nuclear Energy Integration: The incorporation of nuclear power into the energy mix by 2030, with the aim of providing cost-effective baseload electricity. The government has already initiated steps to establish a nuclear program.
    4. Petroleum Sector Expansion: An expansion of petroleum exploration efforts to boost oil and gas production. This involves conducting additional seismic surveys, promoting enhanced recovery techniques, and developing necessary infrastructure.
    5. Energy Efficiency and Conservation: Promotion of energy efficiency and conservation measures to minimize waste. This includes the introduction of new building codes, appliance standards, and public awareness campaigns.
    6. Inclusivity: A commitment to mainstream gender and disabilities considerations into the energy sector. This involves capacity building and data collection initiatives to ensure inclusivity.

    Energy Minister Dr. Matthew Opoku Prempeh has stated that the effective implementation of the policy will necessitate the enactment of new legislation spanning the entire energy sector.

    He expressed hope that the policy will help make Ghana’s energy sector “a sustainable climate-resilient low-carbon energy economy.”

  • 2023 Mid-Year Budget Review identifies energy, cocoa sectors as areas committed to transform

    2023 Mid-Year Budget Review identifies energy, cocoa sectors as areas committed to transform

    Today, Monday, July 31, 2023, Minister for Finance, Ken Ofori-Atta, is scheduled to present the Mid-year budget to Parliament. This highly anticipated review will primarily focus on outlining a comprehensive set of growth strategies, all geared towards promoting greater stability and prosperity for Ghana’s economy.

    Ghana, like many other nations, has encountered significant economic challenges due to the impact of COVID-19 and the ongoing conflict in Ukraine. These external factors have significantly influenced the nation’s economic trajectory.

    Nevertheless, the government aims to address these issues and capitalize on growth opportunities through the Mid-year budget. By implementing effective strategies and policies, the government seeks to steer the country’s economy towards a positive trajectory.

    In particular, there are speculations that the energy and cocoa sectors will be given priority for transformation in the Mid-year budget, given their crucial roles in Ghana’s economic landscape.

    Sources from the Ministry of Finance indicate that the reform agenda for the energy and cocoa sectors is part of a broader Transformation and Growth Agenda. This initiative aims to tackle immediate policy and financing challenges while propelling the nation towards greater stability and prosperity.

    It is believed that the “Ghana Mutual Prosperity Dialogue Framework” will serve as a cornerstone of these reforms, promoting shared growth anchored on job creation, exports, and import substitution.

    The upcoming energy sector reforms are poised to concentrate on ensuring a reliable and efficient energy supply, which is crucial for promoting industrial growth and overall economic development.

    Addressing weaknesses within the energy sector is expected to attract investments, stimulate economic activities, and ultimately lead to job creation.

    Likewise, the cocoa sector, being a significant agricultural export for Ghana, is slated for substantial modernization to enhance production, improve value addition, and increase export earnings. These advancements will directly benefit cocoa farmers and communities reliant on cocoa cultivation.

    Revitalizing the cocoa sector can play a pivotal role in driving inclusive growth and reducing poverty in the country.

    By focusing on these pivotal sectors and implementing strategic reform measures, the government aims to establish a favorable environment for private sector-led investments, further boosting economic growth.

    Moreover, the emphasis on sustainable economic growth and development aligns with long-term objectives to enhance the overall standard of living and quality of life for the people of Ghana.

  • Comprehensive reforms have been prioritised for the energy sector -Ofori-Atta

    Comprehensive reforms have been prioritised for the energy sector -Ofori-Atta

    The energy sector will go through some serious reforms, according to Finance Minister Ken Ofori Atta, in order to prevent the sector from collapsing.

    This comes after the sector’s legacy debt reached about $2 billion as of the end of May 2023, and an estimated shortfall of $5.9 billion between 2023 and 2025, due to the current conditions of State Owned Enterprises and Independent Power Producers in the value chain.

    According to him, these reforms will sustainably reduce losses in the energy sector.

    Furthermore, he said, the expected structural reforms in the sector should reduce the shortfall by at least $2.95 billion over the period.

    “With legacy debt in the Energy Sector reaching about $2 billion as of the end of May 2023, and an estimated shortfall of $5.9 billion between 2023 and 2025, due to the current conditions of SOEs and IPPs in the value chain in the sector, the sector has been prioritised for comprehensive reforms. It is expected that structural reforms in the sector should reduce the shortfall by at least $2.95 billion over the period”.

    “These reforms, which are aimed at sustainably reducing losses in the energy sector, will be outlined in the updated Energy Sector Recovery Plan (ESRP)”, he explained.

    Mr. Ofori Atta stressed that the updated Energy Sector Recovery Plan (ESRP), will be approved by Cabinet by the end of June 2023.

    He opined that it will be accompanied by the operationalisation of a framework to guide the granting of energy sector subsidies by the end of June 2023.

    He furthered that an implementation of an inter-utility debt settlement framework on a quarterly basis will start in June 2023.

    The implementation of a mechanism to enforce the guidelines of the Cash Waterfall Mechanism (CWM) and Natural Gas Clearinghouse (NGC) will also start by end the of June 2023.

  • Ghana has not started paying for energy excess capacity yet – Edward Bawa

    Ghana has not started paying for energy excess capacity yet – Edward Bawa

    Edward Bawa, a Member of Parliament’s Mines and Energy Committee, has refuted speculations made by the ruling New Patriotic Party (NPP) regarding the energy sector debt in Ghana.

    He clarified that the country has not reached a point where it needs to pay for excess capacity.

    Mr. Bawa stated that since 2001, Ghana has never experienced a situation where its available capacity reached 3,700 megawatts.

    He further explained that considering the government’s peak demand of around 3,480 megawatts and the fact that the available capacity falls below that level, it indicates that the country has never had to incur capacity charges.

    The committee member defined excess capacity as when the power generator declares availability, but the off-taker (the entity purchasing the electricity) is unable to utilize it.

    He emphasized that there have been no instances where availability was declared, but the off-taker was unable to access the power.

    “If you look at between 2001 to today, I tell you that to a very large extent, we have actually not gotten to a state where we have to pay excess capacity. If you look from 2001 to 2003 as we speak now, we have not had a situation where our available capacity had gone up to 3,700.

    “So if you have a situation where your available capacity is not up to 3,700 and your peak demand is around 3,480, taking into consideration that you also need redundancy in your system, what it simply means is that we have not had the occasion to pay capacity charges,” he said on JoyNews’ Newsfile on Saturday.

    Mr. Bawa therefore said that there is room to believe that the government has not been transparent in its argument on the capacity charges, warning that until there’s transparency the challenges facing the energy sector will persist.

    Ghana’s energy sector is facing a debt crisis. The NPP has accused the NDC of signing some harsh Power Purchase Agreements which have become a burden on them.

    Country Director for World Bank, Piere Laporte also made the same claim while speaking on the debt crisis bedeviling the sector.

    The NDC has argued that even the NPP MPs at the time the PPAs were signed also appended their signatures to the same measure.

    In 2021, Finance Minister, Ken Ofori-Atta while before parliament disclosed that the government paid a total of $937.5 million to independent power producers (IPP) for excess capacity charges between 2017 and 2020.

    The total debt owed IPPs presently hovers around $1.58 billion. The power producers have also rejected a proposal from the government to restructure the debt.

  • Stop blaming Mahama for current energy sector debt – John Jinapor

    Stop blaming Mahama for current energy sector debt – John Jinapor

    Former Deputy Minister of Power, John Jinapor, has denied allegations that the Mahama administration’s power purchase agreements resulted in a $320 million debt to the country.

    The Chairman of the Mines and Energy Committee of Parliament, Samuel Atta Kyea, at a press briefing on Wednesday, June 14, accused the NDC of signing 43 take-or-pay power purchase agreements, resulting in the current government being obligated to pay over $320 million in 2018 for unused power charges.

    Refuting these claims in an interview with the media, John Jinapor said the NPP is partly to blame for the losses accrued in the energy sector.

    “ECG losses alone have increased from 23 percent to 31 percent so when the Minister of Finance pays for those losses, it is not excess capacity. It is power delivered. There is a power reserve margin of 20 percent and it is statutory and this government came and decided that it shouldn’t be part of the tariff structure and it is a political decision.”

    The Yapei-Kusawgu legislator blamed the massive leakages, forex losses, exchange differentials and other factors other than what Mr. Atta Kyea is alleging for the ballooning energy debt.

    “The problem is a result of forex losses, exchange rate differentials, and the unnecessary political interference which is leading to this payment and it cannot be attributed to former president Mahama. Immediately these PPAs expire, they quickly renew them and not from the five years that we did but for fifteen years. We will not allow these double standards to go because the facts speak for themselves.”

    On claims by Mr. Atta Akyea that the Mahama government entered 43 take-or-pay power purchase agreements, resulting in the current government being obliged to pay over $320 million in 2018 for unused power charges, Mr Jinapor said the allegation is untrue.

    “Some of the agreements he has said were not signed by Mahama, so he has to give further information on the 43. This is a simple analogy. You said the man signed 43 agreements, provide the 43,” he added.

  • Akufo-Addo highlights energy infrastructure investment as catalyst for industrialisation in Ghana

    Akufo-Addo highlights energy infrastructure investment as catalyst for industrialisation in Ghana

    President Nana Akufo-Addo is upbeat about the prospects of Ghana’s industrialisation drive following the Government’s massive investment in energy infrastructure.

    He said countries seeking to industrialise in the 21st Century must aspire for a stable, efficient and affordable power supply.

    President Nana Akufo-Addo, who was inaugurating the Accra Central Bulk Supply Point (BSP), at Adabraka, in the Greater Accra Region, explained that “electricity is no longer a luxury, but a necessity in this age”.

    In view of this, he noted that the country was working assiduously to achieve universal access to electrification by 2025.

    The US$40 million BSP project is a Japan-funded facility through its external technical agency, the Japanese International Cooperation Agency (JICA).

    The project was conceived, following the decision to construct a BSP in proximity to the Accra Central Business District (CBD), and involves the construction of a 161/34.5 Kilovolt (kV) substation in a single bus configuration.   

    President Nana Akufo-Addo explained that the initiative was informed by the fact that the electricity load in the CBD was growing at a higher rate than the system average of 10 per cent per annum.

    The Accra CBD has in recent times seen an upsurge in commercial and industrial activities, scaling up the power demands.

    The President lauded the Japanese Government for assisting the country to build a vibrant energy sector, adding that, it was needed for rapid socio-economic growth.

    The facility is the fourth major bulk power supply point to be inaugurated in the last 18 months, reinforcing Ghana’s determination to reduce to the barest minimum transmission and distribution losses.

    “We are committed to keep the power on,” President Nana Akufo-Addo assured.

    He was optimistic that the erratic power supply that marred the country’s socio-economic development some years ago would be a thing of the past given the Government’s bid to invest in energy infrastructure.

    The Minister of Energy, Dr. Mathew Opoku-Prempeh said the country had worked hard to stabilise power supply, and commended the Nana Akufo-Addo-led Administration for its investment in the energy sector.

    Mr. Mochizuki Hisanobu, the Japanese Ambassador to Ghana, said his country cherished its long-standing partnership with the West African country and pledged Japan’s continuous support to Ghana.

  • Ghana’s Energy sector faces challenges, proposes reforms under IMF programme

    Ghana’s Energy sector faces challenges, proposes reforms under IMF programme

    Ghana is currently grappling with significant challenges in its energy sector, prompting the government to propose a series of reforms as part of its International Monetary Fund (IMF) programme.

    The IMF has identified several issues plaguing the sector, including below-cost-recovery tariffs, substantial distribution losses, and excess capacity, which have led to significant financial burdens for the central government.

    These challenges have resulted in annual transfers equivalent to two percent of GDP since 2019, along with mounting payables to independent power producers (IPPs) and fuel suppliers.

    To tackle these pressing concerns, Ghanaian authorities, with the support of the World Bank, have developed an energy sector reform programme aimed at revitalising the entire sector.

    The programme encompasses various aspects, such as renegotiating Purchasing Power Agreements (PPAs) to mitigate take-or-pay liabilities, tariff adjustments, improving the operational performance of energy state-owned enterprises (SOEs), subsidy reforms, reducing distribution losses, and enhancing collections.

    However, the implementation of these measures is expected to be a challenging and time-consuming process.

    In an attempt to bridge the financial gap, the Public Utilities Regulatory Commission (PURC) recently raised electricity tariffs by nearly 30 percent, with cumulative increases reaching 57 percent since mid-2022.

    Further quarterly tariff adjustments are planned for 2023 to account for exchange rate and price fluctuations and bring tariffs closer to cost-recovery levels. Nonetheless, it remains uncertain whether these adjustments will be sufficient to alleviate the sector’s financial strain.

    Recognizing the need to protect vulnerable households from the impact of tariff adjustments, the government intends to redefine lifeline tariffs to better target low-volume users and the poorest households.

    Additionally, a mapping exercise will be conducted to assess the effectiveness of the existing cash transfer program in supporting economically disadvantaged households with electricity access.

    The goal is to calibrate the program more effectively, although concerns persist regarding its ability to adequately address the needs of the most vulnerable.

    Despite the proposed reforms, there are lingering concerns about the transparency and sustainability of Ghana’s energy sector. Previous budgets have faced criticism for relying on overly optimistic revenue projections and unrealistic spending cuts.

    While the 2023 budget aims to address these issues by adopting more realistic assumptions, doubts remain regarding the government’s ability to fully implement the reforms and ensure transparency within the sector.

    The success of the reform programme hinges on effective execution and collaboration among various stakeholders. However, given the complex nature of the challenges faced by Ghana’s energy sector, achieving significant progress may prove to be an uphill battle.

    Moreover, the projected reduction in the sector’s financial shortfall appears modest, raising doubts about the government’s ability to create sufficient fiscal space for priority spending.

    While Ghana’s efforts to reform the energy sector are commendable, the road ahead is riddled with uncertainties.

    The true test lies in the implementation and effectiveness of these measures, as well as the government’s commitment to transparency and long-term sustainability.

    Only time will reveal whether these proposed reforms can genuinely address the deep-rooted issues and pave the way for a more stable and resilient energy sector in Ghana.

    Source: The Independent Ghana

  • Deliberate data misreporting claims completely untrue – Ofori-Atta

    Finance Minister Ken Ofori-Atta has categorically denied dishonestly misreporting economic data to Parliament.

    The allegation of deliberately misreporting economic data to parliament is completely not true, he said, responding to a censure motion filed by the Minority.

    Contrary to the position of others that the ministry did not reflect the Finsec payments and the energy sector IPP payments in the fiscal framework, he emphasized – with the Budget document as evidence – that these payments were reflected in the fiscal framework.

    The Minority based their accusation of deliberately misreporting economic data to parliament on grounds that the financial sector clean-up and energy sector Independent Power Producers (IPP) payments were excluded from public debt.

    According to the Minority, by treating these debts differently the fiscal deficit is reduced to make economic indicators look good.

    He said the ministry included the energy sector Independent Power Producers (IPP) payments in the ‘amortisation’ line in the Fiscal Framework during 2018-2021.

    Energy Sector Excess Capacity payments of GH¢17billion relate to a legacy of take or pay contracts that saddled the country’s economy with annual excess capacity charges of close to US$1billion.

    Government had to pay around US$500million a year in excess capacity charges for power the previous administration negotiated – which the country did not need and does not use.

    Similarly, he said the financial sector clean-up costs were included in the fiscal framework annually for the period 2018 to 2021 to reflect the issuance of bonds to cover the non-cash costs.

    Government directly spent GH¢25billion to save the banking and SDI sector – preventing a near-collapse of the financial sector; saving close to 5,400 direct jobs and 12,000 indirect jobs; and ensuring that 4.6 million depositors were protected.

    Mr. Ofori-Atta explained that these are extra-ordinary payment items which need not be mixed-up with traditional fiscal operations

    He explained that these are largely bonds, and capturing them above the line will imply recognising their payments now and again when they fall due in the future – a possible double counting.

    The Finance Minister stated that the Energy sector IPP payments were reflected in the fiscal framework as part of the Amortisation line under the Financing part of the fiscal table.

    He noted that these are debts of State Owned Enterprises (SOEs) that have been assumed by government and are largely contingent liabilities that have crystalised for payment.

    Ofori-Atta said the Finsec bailout exercise is largely completed, and therefore ceases to be an extraordinary budget item

    On the other hand, he said IPPs payments are expected to be made over the medium-term; and given that they have become explicit contingent liabilities, appropriately budgeting for them “above the line” ensures resources are duly allocated for their settlement

    He stated the ministry agreed with the Finance Committee of Parliament in 2021 that going forward from 2022, both the Energy IPP payments and Finsec payments will be treated “above the line” in the fiscal framework for the following reasons.

    According to him, the agreed style of reporting to the International Monetary Fund (IMF) was to show a deficit including the Finsec clean-up and another one excluding it.

    According to him, under this government there have been significant improvements in the accurate reporting of public finances; and Ghanaians are enjoying greater accountability and transparency in management of the public purse than during any other period before.

    Ghanaians will recall that in support of data presented by the Ministry of Finance in May 2020, Dr. Albert Touna Mama – the then-country representative of the IMF – came on Joy FM’s News File Programme to state that there was no misrepresentation of data by government as was being alleged. Dr Touna Mama said government was not the one that presented the figures which the IMF published in its statements.

    He explained that the difference in figures was as the result of a difference in methodology of calculation, adding that the figure in fiscal deficit in their statement was a figure they generated themselves from the data government presented to them – having added financial and energy sector payments in line with their methodology, which is different from government’s methodology.

  • Women urged to position themselves strategically for green energy jobs

    Women and female students in the energy sector have been advised to position themselves strategically to secure green jobs.

    This has become necessary as the world is transitioning to renewable energy sources to reduce global carbon emissions to mitigate the effects of climate change.

    Professor Ellen Bortei-Doku Aryeetey, Head of the Centre for Social Policy, University of Ghana, made the call in a keynote address delivered at the Third Women in Energy Conference in Accra.

    The conference, held on the theme, “Women in Energy: Collaborating to transform our sector”, attracted players in the energy sector to discuss opportunities for women in the energy sector and rally women employee associations in energy institutions to have a collective voice on issues.

    The event was organised by the Millennium Development Authority (MiDA) with financial support from the Millennium Challenge Corporation (MCC) as part of the Ghana-Compact II to empower women to be self-reliant and contribute their quota towards national development.

    So far, MiDA and its partners have trained more than 650 women and female students in energy programmes to make them adaptive to energy-related fields of work.

    Prof. Aryeetey observed that the world was gradually shifting from fossil fuel to renewable energy sources and underlined the need for women to acquire relevant skills in eco-transition to secure gainful employment in the energy sector.

    “Green jobs for women is becoming very crucial in eco-transitioning, and so, women in Ghana should not be left behind but must be active players with a collective voice to transforming the economy,” she emphasised.

    Mr Martin Eson-Benjamin, the Chief Executive Officer for MiDA, in his welcome remarks, said the event intended to provide the opportunity for women to network, exchange ideas and harness the experiences and best practices of Female Employee Associations to strategise towards the advancement of gender equality and social inclusion in the energy sector.

    He said with the Millennium Challenge Compact ending in June next year; it was imperative that MiDA rally women in consolidating the gains made so far and work together towards scalable and lasting change in the energy sector.

    There were goodwill messages from the Electricity Company of Ghana (ECG), Ghana Grid Company Limited (GRIDCo), and the Ministry of Energy thus, assuring that they would provide a congenial environment for mentoring female leaders in the energy sector.

    Source: GNA

  • We must control energy systems used in Ghana Fox Company MD

    The effect of climate change will eventually affect everything on earth if not addressed, the MD of Fox Cooling Company Ltd, has said.

    Mario Yazbeck, speaking on the matter, stated that human activities such as deforestation, burnings from fuel, coal, oil, and gas have been the main cause of climate change in the world.

    According to him, reports on Global warming evidently show that the earth is now about 1.1°C warmer than it was in the past.

    He further cautioned that as concerned citizens, we must collectively work together to combat the consequences of climate change which now includes intense droughts, water shortage, fires, rising sea levels, floods and disastrous storms which are harmful to human existence.

    In recent times, global warming and climate change have become an important issue that has received global attention.

    We must control energy systems used in Ghana - Fox Company MD

    This is because the earth is an interconnected setup, where, changes in one area can influence changes in all others.

    Amongst the few who have shown concern on the subject matter is the Fox Cooling Company MD.

    Mr. Yazbeck mentioned that one way through which climate change can be checked is by controlling the energy systems used in the country.

    He said Fox Cooling as part of its effort to protect the environment ensures that it does not focus on simply acquiring and using good quality equipment, but also ensures to use good quality equipment that “heals” rather than harms the environment.

    Mr Mario said, “By associating with Fox Cooling, you automatically improve your own green print and together we heal our environment sustainably, so we can own it for our future businesses”.

    Fox Cooling Company Ltd is one of the leading HVAC industry and the official distributors of leading brands like Daikin air conditions, Sodeca ventilation and Tecnair close control in Ghana and across West Africa.

    Source: myjoyonline.com

  • US$5 billion saved in energy sector Government touts prudent decisions

    Finance Ministry has said prudent steps taken by the government in the energy sector has saved the sector over US$5 billion.

    In a statement dated December 3, 2020, the Finance Ministry said it made the savings by relocating the Karpowership and securing agreements with CENIT Power Limited.

    “In 2020 alone, this government has paid in excess of US$1 billion to Independent Power Producers. This is on top of GH¢2.7 billion paid by Electricity Company of Ghana Limited,” the Finance Ministry said.

    The statement said the government was committed to undertaking the Energy Sector Recovery Programme (ESRP) in good faith and in partnership with its stakeholders.

    “Government welcomes the collaboration and commitment shown by Independent Power Producers (IPPs) so far and calls for their support in bringing the negotiations to a swift close,” the statement said.

    The IPPs had earlier threatened to withdraw their services over government and ECG indebtedness to them.

    But according to the statement from the Finance Ministry, the energy sector in Ghana is faced with several challenges and many of them were inherited by the current government from the previous administration.

    “While attempting to provide emergency power to address a spate of persistent load-shedding (dumsor) which crippled business and adversely affected GDP growth as a result of signed contracts with IPPs in an uncoordinated and non-competitive manner.

    “Consequently, today, Ghana pays over $500 million a year in excess capacity payments, i.e., payment for power that it simply does not use or need. Despite the challenges, this Government has prioritised making payments to the IPPs to reduce the debts,” the statement said.

    A spokesperson for the ESRP is quoted in the statement as saying: “This Government has successfully kept the lights on over the past four years and intends to continue doing so for the years to come. The electricity produced by IPPs drives the engine of our economy and contributes to sustainable development. The onerous take-or-pay contracts painfully obligate Government to pay over US$500 million a year for power we do not use.

    “This year alone, Government has made payments of $1 billion to independent power producers, all while keeping the power on and prices low.

    “Government will continue to manage the situation by negotiating more balanced contracts, reducing the debt, instituting careful forward planning and proper data-driven analysis, as well as transparent, competitive, energy procurement processes to build a resilient, sustainable energy sector for the good people of Ghana.”

    Government said it remains committed to building an energy sector based on long-term energy security, sustainable investment, and partnerships to bring affordable accessible energy to Ghanaians in line with the vision of a Ghana Beyond Aid.

    “To achieve this vision, Government has taken pragmatic and decisive action to manage the energy sector. In collaboration with the World Bank, Government established the ESRP, identifying the policies and actions needed for financial recovery in the energy sector over a five-year horizon (2019-2023),” the statement indicated.

    The Government Negotiating Team, established under the Energy Sector Recovery Task Force (ESRTF), which is helmed by the Senior Minister, is working bilaterally with IPPs and Gas Suppliers under the ESRP Consultation Process, to secure more favourable and sustainable agreements for both parties, the statement added.

    Source: www.ghanaweb.com