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04.11.2003 General News

Government to increase support for Utility Companies

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Accra, Oct. 4, GNA - Mr Yaw Osafo-Maafo, Minister of Finance and Economic Planning, on Tuesday said Government would have to increase its support to the Volta River Authority, Electricity Company of Ghana and Ghana Water Company Limited for them to continue providing their services in a sustained manner.

He said Ghana's power generation was sourced from two hydro and two thermal power installations, whose generation mix had changed in recent years.

Mr Osafo-Maafo said this when he moved a Motion in Parliament to present a review of the Economic Performance of the Government for the 2003 Financial Year.

He said in 2001, 79 per cent of generation was from hydropower sources reducing to 59 per cent in 2002 and it is estimated to drop further to below 30 per cent for 2003.

The Minister said this had serious implications for production costs since thermal generation currently depended on imported crude oil. He said in order to support the generation of power from thermal source as a result of shift from hydro generation to thermal generation of power, the Ministry had to support the Volta River Authority with the importation of crude oil at a cost of 90 million dollars equivalent to about 646 billion cedis in 2002.

Mr Osafo-Maafo said about 255 billion cedis was also used for the same purpose in 2001 and in 152 billion cedis has so far been released in 2003 as a direct subsidy to the VRA.

He said the cumulative financial support to the VRA for crude oil imports since 2001 amounted to about 991 billion cedis.

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