Business News Fri, 31 May 2019

GHC3.9bn targeted for collection under ESLA

For 2019, a total of GHc 3, 947.82 million has been targeted for collection under the Energy Sector Levy Act, (ESLA) representing an increase over 2018 collections of GHc 440.78 million, and 12.6 percent higher than the targeted amount for last year of GHc 3,507.04 million.

If this target is met it will enable faster resolution of the energy sector’s problematic legacy debts as well as increased pace of direly needed power generation and transmission infrastructure as well as improved road maintenance.

The ESLA account at the end of 2018, recorded a closing balance of GHc 615.42 million.

The forecast is contained in the Annual Report on the Management of the Energy Sector Levies and Accounts for 2018, submitted to Parliament, made available by the Finance Ministry on Tuesday.

The ESLA account is made up of balances in the Energy Debt Service Account (EDSA), Power Generation and Infrastructure Support sub-Account (PGISsA), and Price Stabilisation and Recovery Account (PSRA) of GHc 69.07 million, GHc 69.18 million and GHc 326.60 million respectively. The Energy Debt Recovery Levy (EDRL) also recorded a balance of GH¢150.57 million at the end of the year.

The Energy Sector Levies Act, 2015 (Act 899) as amended (Act 946), was passed into law in 2015, mainly to address the huge debt burden and operational challenges facing State Owned Enterprises (SOEs) in the Energy Sector; support power generation and power supply sustainability; subsidize premix and stabilize petroleum prices; support road maintenance; as well as fund the activities of the Energy Commission.

Bonds Issued

E.S.L.A. Plc had issued bonds with a face value of GHc 5,664.72 million as at December 2018, as part of the Government’s plan to refinance Energy Sector debts. The issuance of the bonds resulted in the reduction of State Owned Enterprise (SOE) debts to its creditors by approximately GHc 5,453.20 million as at end 2018.

Total transfers from the ESLA Accounts towards the servicing of the ESLA bonds amounted to GH¢1,353.71 million. Of the total amount transferred, E.S.L.A Plc made coupon payments of GH¢1,043.30 million with cash held in excess of the Debt Service Reserve amount transferred into a Lockbox Account for the benefit of bond holders.

Utilization of Levies

According to the report, a total amount of GH¢2,565.50 million was utilized out of the total levies collected for the period.

Aside the transfers made to E.S.L.A. PLC towards servicing the ESLA bonds, GHc 47.72 million was transferred for the payment of power utility debts and GHc 4.20 million for the payment of Letters of Credit (L/Cs) and L/C charges related to energy imports.

Further to this, GHc 245.68 million was transferred for the payment of premix and Residual Fuel Oil (RFO) subsidy, and GHc 685 million was paid into the Road Fund for road maintenance while GHc 13.07 million was transferred to fund the activities of the Energy Commission during the year.

Electricity Distribution Companies (EDCs) retained GHc 116.63 million to cover the cost of providing public lighting; and GHc 82.67 million was transferred to the Ministry of Energy (MoEn) for Public Lighting Infrastructure and the implementation of the National Electrification Programme to increase nationwide access to electricity.

Source: goldstreetbusiness.com