GHANA’S ENERGY SECTOR ON THE VERGE OF COLLAPSE

John Abdulai Jinapor, Former Deputy Minister of Energy, Ghana

Accra, Ghana, July 8, 2019//-Ghanaians must  prepare to face power disruptions in the coming weeks if nothing is done urgently  to salvage the already crumbling Energy sector under the Akufo-Addo  administration.

This precarious situation is arising mainly from mismanagement of the energy sector which has led to mounting debts.
Presently,  Ghanaians are being subjected to a “SILENT LOAD SHEDDING” amidst denials from Government and the Power Distribution Services (PDS) Co. Ltd.
Since taking over from ECG, the Power Distribution Services Co. Ltd. has demonstrated gross incompetence and a lack of both financial and technical expertise in managing the distribution sector of the electricity value chain.
I wish to reiterate my initial stance that The ECG/PDS agreement in its current form, is very bad and will certainly not inure to the benefit of Ghanaians.
Additionally, my checks show that PDS has so far not raised the requisite financial guarantees which was a major condition precedent prior to taking over a critical State-owned company such as the ECG with an asset value of *GH?22 billion* and a workforce of more than 6,000.
It is curious, mind-boggling and alarming to note that PDS has so far not injected the needed financial capital as stipulated under the concession agreement.
On the contrary the company has resorted to appropriating all revenues collected from Ghanaians (including expected payments) to shore up their capital requirements. This appropriation includes expected payments to Transmission and generation Companies.
PDS is clearly violating the Concession Agreement by refusing to release funds meant for other entities in the electricity sector as stipulated in the tariff structure.
How can a company supposedly contracted to inject its own capital to improve the electricity sector turn around to depend on ECG’s already existing funds for their operations?
This is a clear case of “Robbing Peter to Pay Paul.”
As a result of these illegalities and infractions, PDS has failed to remit payment to Independent Power Producers (IPPs) for four months since taking over the operations of ECG.
Consequently, the Independent Power Producers in Ghana have served notice to government through the Ministry of Finance, to impress upon Power Distribution Services (PDS) to expressly release funds to pay all outstanding debts – estimated at US$300million as at June 2019; or they shut down their plants.
Well-meaning Ghanaians must, therefore, call for an independent and competent team to be constituted to investigate the processes that led to the selection of PDS as the sole candidate for the concession and its activities thereof.
We must also resist any attempts to increase the cost burden on Ghanaians.
Therefore, having failed to fulfil the promise of scrapping the Energy Sector Levies Act (ESLA) as promised in the run up to the 2016 elections, I wish to caution the Akufo-Addo government to refrain from any attempt aimed at increasing the levies from ESLA in the imminent 2019 Mid-year budget review because this will be resisted vehemently.
Furthermore, the Ministry of Energy must also desist from any clandestine attempt at extending the tenure of the Karpower, Aksa and Cenit Power Purchase Agreements as this will amount to double standards and will ultimately not inure to the benefit of Ghanaians.
By John Abdulai Jinapor, Former Deputy Minister of Energy and Petroleum, Ghana

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