29.07.2021 Business & Finance

2021 budget review: A focus on energy sector

2021 budget review: A focus on energy sector
LISTEN JUL 29, 2021

The energy sector, which is expected to feature in the budget review, has faced some setbacks since the beginning of the year.

The Energy Ministry and its sector minister, Mattew Opoku-Prempeh had a difficult beginning to the year as a result of the resurgence of the intermittent power supply popularly called “dumsor”.

At the beginning of the year, some parts of Ghana experienced power supply challenges including long periods of outages, low voltage, and intermittent outages.

This compelled the Electricity Company of Ghana (ECG), to issue a load-shedding timetable for parts of Accra and other parts of the Ashanti Region.

The outages, according to the power distributor, were to allow the Ghana Grid Company (GRIDCo) to complete the last phase of repair works on some bulk supply points and transmission cables in Accra.

This led to a public uproar with businesses complaining about its effects on their operations, while some analysts also attributed the outages to debts in the sector.

For instance, the Institute for Energy Security (IES Ghana), at a point, urged Ghanaians to brace themselves for continuous power outages because of a $1 billion debt owed Independent Power Producers.

The Institute insisted that the debts were putting constraints on power generation and distribution in the country.

Nana Amoasi VII , the Executive Director of the institute, in a Citi News interview, said the debts could lead to more outages.

“There are transmission issues and distribution inefficiencies, and all these, you will need money to address them, and we have our energy sector debt go up, causing a lot of cashflow constraints for these utilities to change their systems.”

“So I can boldly tell you that the government owes the IPPs close to $1 billion. So every moment you see the debt rising with the sector and that cash constraints create a lot of maintenance challenges, that affects the reliability of power supply.”

A former Deputy Minister of Power, Mr. John Abdulai Jinapor also corroborated the views expressed by the IES.

“Somebody is not telling us the truth, and in this difficult moment, when people are struggling, there ought to be clarity and certainty. If indeed power is not adequate in terms of the transmission line, tell the people of Ghana and assure us of what you are doing,” he said.

However, the Minister of Energy, Dr. Matthew Opoku Prempeh , rejected the claims.

The Minister insisted that such claims were borne out of wishful thinking by critics of the Akufo-Addo administration.

Dr. Opoku Prempeh, at one of the Minister's press briefings on the theme, 'Delivering Reliable and Affordable Power' at the Information Ministry on Sunday, May 16, 2021, said the assertions were unfounded.

“These problems are not financial because the problems are being solved, and we pleaded with Ghanaians to bear with us. We work to make the power supply more dependable in the country. I also urge you to ignore those making wishful thinking on the situation.”

“The problems are being solved, and by the end of the year, we should have much stable power for all of us. Kindly bear with us as we fix these problems in our collective interest.”

Furthermore, the Ministry settled a legacy debt of $42 million to N-Gas in a move to enhance the country's quest to use clean fuel for its power generation and also to afford the two countries opportunities for further discussions going forward.

The Finance Minister is also expected to update Ghanaians on the energy sector debt, how much money the country has accrued since the 2021 budget statement was read and what government has been up to in the sector.


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