Government is yet to fully settle electricity subsidies granted as Covid-19 relief to the Electricity Company of Ghana.
This is captured in a report by the power distribution firm submitted to the Public Utilities and Regulatory Commission (PURC) for consideration to increase electricity tariffs.
ECG, however, expects the government to continue to honour its debt obligations to keep the company afloat.
Therefore, it expressed worry that subsidies expected to be paid by government on behalf of customers are always in arrears, thereby negatively affecting the company’s financial health.
In the last few years, the government’s indebtedness to ECG had gone down to ¢4.2 billion.
Government’s indebtedness to ECG in the last few years were ¢1.015 billion (2019), ¢1.375 and ¢1.840 billion (2021).
The components of government bills are MDAs, GWCL, Subsidies, Streetlight shortfall, Utility Relief granted to all customers from July 2016 to June 2019 and Covid-19 Relief.
Government settles ECG 16.76bn of its indebtedness
Between 2019 and 2021, government paid ECG ¢16.76 billion as its indebtedness.
The various government payments, the report said, were reconciled with stakeholders in the electricity value chain and applied to reduce government indebtedness.
In 2019, government paid a total amount of ¢4.592 billion out of which an amount of 1.840 billion was paid to fuel suppliers and ¢2.751 billion to Independent Power Producers (IPPs).
In 2020, government paid a total amount of ¢5.925 billion, out of which an amount of ¢1.597 billion was paid to fuel suppliers and ¢4.328 billion to IPPs.
In 2021, government paid a total amount of ¢6.243 billion, out of which an amount of 1.230 billion was paid to fuel suppliers and ¢5.013 billion to IPPs.
Importantly, 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”.
