ECG needs private investment to settle its debts – ACEP

Executive Director of the African Centre for Energy Policy (ACEP), Benjamin Boakye, has stated that the Electricity Company of Ghana (ECG) needs private investment.

According to him, government also needs to divide the financing requirements into manageable portions for Ghanaian businesses to take over.

This, he said, would help the power distribution company rake in some more revenue to clear the debts owed some Independent Power Producers (IPPs).

In a graphic report sighted by GhanaWeb Business, Benjamin Boakye said, “This approach will encourage domestic investors to pool resources to raise equity and underwrite additional debts for investment in ECG on an appropriate thin capitalisation rule.”

“ACEP strongly recommends that the government divide the financing requirements into manageable portions that Ghanaian businesses and funds can absorb,” he stated.

He also called on ECG to account for revenues accrued from September last year under the Cash Waterfall Mechanism (CWM).

The Executive Director of ACEP bemoaned the decrease in monies received under the CWM from 50% to 11% despite the increase in tariffs last year.

“Therefore, ECG needs to account for all its revenues over the period, including the GH₵3.1 billion it has recovered from debts,” he pointed out.

Benjamin Boakye stated that the recurring challenges in ECG require the involvement of the private sector for its sustainability.

It would be recalled that the ECG on March 20, 2023, embarked on a nationwide disconnection exercise.

The exercise was aimed at retrieving GH¢5.7 billion debt from its debtors.

According to the Managing Director of the Electricity Company of Ghana, Samuel Dubik Mahama,the power distribution company risks shutting down if it doesn’t settle the $1 billion debt owed some IPPs.