Free Power: Relief or shot in the foot of a debt-ridden energy sector?

Ghana spends between $300 and $350 million dollars a month on power generation.

Mathematically, she spends about one billion dollars every quarter (3 months) on electricity generation.

Let’s assume, all consumers will pay 50 per cent for the next three months. This means government will have to cough about $500 million for this intervention.

Already the government is seeking 9.5 billion cedis ($1.7bn) to weather the impact of the pandemic on the local economy. Which fund to dip hands into, to raise the amount has become an emotional and a partisan affair.

The energy sector is already on its knees over debts owed Independent Power Producers ($1bn plus), $420 million (excess capacity charges + $100m Eurobond interest), and $1.3 billion dollars owed ECG.

The revenue streams created such as ESLA to service the nearly three billion-dollar debt have yielded little because monies are diverted to address ‘other’ concerns. It’s a whole crap.

Then the government, out of disingenuous partisan pressure, subsidizes electricity, knowing very well what subsidization has caused the energy sector. Governance is not easy, admittedly, but state managers MUST BE FIRM.

The 500 million dollars could have been used to service the sector’s debt, or at least improve ECG’s operations to ensure reliable power supply. Ghanaians will CHERISH reliable power even if it’s expensive than to return to DUMSOR. But who am I, a young journo to advice an elite administration.

Don’t forget, we handed over ECG - a strategic national security asset - to PDS over the same $500 million we are ready to spend for just three months, in the name of private sector participation. How that deal ended is to broad and dramatic for today’s discussion.

In the meantime, amidst the pandemic, the IPPs will issue a statement over debts owed them.

God save mother Ghana.