GH¢1bn allocation for electricity relief won’t affect energy sector debt – Nana Damoah

Head of Communication at the Ministry of Energy has allayed the fears of stakeholders, stating that the amount of money government will spend in subsidizing electricity tariffs for citizens won’t affect the country’s energy sector debt.

In an interview with Citi FM’s Eyewitness, Nana Damoah said funds are ready to pay electricity suppliers for the period of the reliefs.

“This will not in any way affect the current position of the energy sector in terms of debt because government, led by the President, made a decision to provide some relief to the people of Ghana in this era of COVID-19.”

In his six address to the nation of the Coronavirus pandemic, President Nana Addo Dankwa Akufo-Addo announced that government will fully cover the bills of low-income consumers of electricity while consumers in other categories will enjoy a 50 percent reduction in the cost for April, May and June 2020.

Energy Minister, John Peter Amewu, revealed at a press conference on Thursday, 16th April 2020, that government will spend a little over GH¢1 billion on the electricity relief package.

“This means that at the current tariff level, Government is absolving almost an amount of GH¢8.5 million per month for (lifeline customers),” Mr. Amewu stated.

Stakeholders within the energy sector such as ACEP have stated that the reliefs will likely worsen the country’s already high energy sector debt.

But the spokesperson for the Energy Ministry insisted that the current arrangement will not affect the Energy Sector debt.

“What this means is that this cost or this debt we are about to incur has been planned for by government and government will provide those amounts of money from outside the normal operations of the electricity company of Ghana. So government has said these amounts that have been brought before it are going to be paid on a monthly basis. It, therefore, does not affect the revenue of the ECG in any way. The Ministry of Finance has given the highest assurances that the money has been found and is available to be paid at the end of every month to ensure the continuous operation of all of these,” Nana Damoah said.

Ghana’s energy sector debt is believed to currently stand at GH¢15 billion.