The Volta River Authority (VRA), and the Ghana Grid Company Limited (GRIDCo), would be listed on the Ghana Stock Exchange as part of measures to make them efficient enough to strengthen Ghana’s power sector. This is the indication from President Nana Akufo-Addo. According to him, his administration is considering the decision to list the two institutions to make the country’s power sector more effective.
He added that this will also form part of government’s plan to develop an electricity master plan. “…Overall, we have begun to develop a national electricity master plan which will also explore the benefits of listing VRA and GRIDCO on the stock exchange,” the President stated when he addressed Parliament in his first State of the Nation on Tuesday.
The move, if successful, will be a fulfillment of what some analysts have suggested as the best alternative to solve the country’s recurrent challenges in the power sector. Currently, the debt owed institutions in the energy sector is estimated at 4.4 billion cedis.
The development has also had a toll on the performance of the financial sector as most banks have lent huge sums to VRA. The continuous delay in the payment of the debt, has also compounded the debt portfolio of the banks. “We have inherited a heavily indebted energy sector with a net debt reaching 2.4 billion Unites States Dollars as at December 2016. I have to point out the alarming fact that eight hundred million of this debt is owed to local banks which threaten their stability and that of the whole financial sector. Indeed, the huge indebtedness of the energy sector constitutes the single major hurdle to Ghanaians to enjoy reliable and affordable electricity supply.”
High tariffs The President also bemoaned the high tariff regime in Ghana which in his view, made local businesses not competitive enough even within the sub-region. As an alternative, the NPP government is set to review the current tariff policy to relieve the plight of lifeline consumers. “We produce power from Akosombo at 3 cents per kilowatts hour, the marginal price for businesses is an effective 42 cents; more than ten times the average tariff in West Africa.
This makes it difficult to start a business here and be more competitive.” Meanwhile, Nana Addo says his government will review power agreements signed under the NDC administration. To this end, the government says it will ensure transparency in deals and provide value for money. “As at the end of 2016, the Electricity Company of Ghana, had signed 43 power purchase agreements, whiles a further 23 were under discussion. Government is conducting a review of all the power agreements entered into by the previous government in order to prioritize, renegotiate, defer or cancel outright if necessary in the national interest.”