Government has paid a total of GH¢16.76 billion to the Electricity Company of Ghana (ECG) as part of power subsidies granted to Ghanaians as utility relief and COVID-19 respite packages between 2019 and 2021.
However, government is yet to fully settle its indebtedness as captured in a report by the state-owned power distributor submitted to the Public Utilities and Regulatory Commission (PURC) for consideration to increase electricity tariffs.
The ECG expects the government to continue to honour its debt obligations to keep the company afloat.
It has therefore expressed worry that subsidies expected to be paid by government on behalf of customers are always in arrears, which is negatively affecting the financial viability of the company.
It must however be stated that government’s indebtedness to ECG had gone down to GH¢4.2 billion in the last few years.
The indebtedness to ECG were GH¢1.015 billion in 2019, GH¢1.375 and GH¢1.840 billion in 2021.
The components of government bills are Ministries, Departments and Agencies (MDAs), Ghana Water Company Limited (GWCL), Subsidies, Streetlight shortfall, Utility Relief granted to all customers from July 2016 to June 2019 and Covid-19 Relief.
According to the report by the ECG, the various government payments, were reconciled with stakeholders in the electricity value chain and applied to reduce government indebtedness.
In 2019, government paid a total amount of GH¢4.592 billion out of which an amount of 1.840 billion was paid to fuel suppliers and GH¢2.751 billion to Independent Power Producers (IPPs).
In 2020, government paid a total amount of GH¢5.925 billion, out of which an amount of GH¢1.597 billion was paid to fuel suppliers and GH¢4.328 billion to IPPs.
In 2021, government paid a total amount of GH¢6.243 billion, out of which an amount of GH¢1.230 billion was paid to fuel suppliers and GH¢5.013 billion to IPPs.
Significantly, the total amount paid by government under this arrangement was more than government’s indebtedness.
“The total amount paid by government under this arrangement was more than Government’s indebtedness and the balance was treated accordingly as other government equity”, the ECG reported stated.
