The International Monetary Fund (IMF) has warned financial losses among state owned energy enterprises, will continue if authorities fail to tackle current challenges.
The sector has for some time now been hit with increasing debt arising from inefficiencies and poor management.
Government which is highly indebted to state enterprises in the sector last year – 2016, finalized plans to restructure debts in the industry.
As at January, this year – 2017, the debt was at a whopping 2.4 billion dollars.
Energy debt breakdown
A breakdown of the debt shows that the banks are owed 782 million dollars, while fuel suppliers are owed 440 million dollars.
The 782 million is debt owed the banks by state owned power producer Volta River Authority (VRA).
VRA also contributed 278 million dollars to the 440 million dollars owed fuel suppliers, while TOR contributed 162 million dollars.
Other entities owed include GRIDCo, NEDCo, Asogli, CENIT, Bui, Ghana Gas, BOST, GNPC and other power producers. Under the total debt Government owes GRIDCo 62 million dollars, NEDCo 19 million dollars, Asogli also 19 million dollars.
The others owed are CENIT which is owed 77 million dollars, Bui 2016 million dollars, Ghana Gas 314 million dollars, BOST 122 million dollars and GNPC 226 million dollars, while other power producers are owed 124 million dollars.
Government to issue energy bond
Government earlier announced it will issue a 15 year bond to settle the debt.
Government s seeking to raise 10 billion cedis for the bond which is expected to be issued by the end of September, 2017 .
The Finance Minister, Ken Ofori Atta who disclosed this to Citi Business News stated that work has intensified to get the bond launched and closed by September end.
“Work is being done quite aggressively about it…there was a mini roadshow in England some three to four weeks ago and we had a meeting here in Accra so the structuring is being done and the expectation is that by the end of this month, they should be able to launch the bond and hopefully close it,” he remarked.
IMF raises concerns
But the IMF in its latest executive assessment of Ghana said despite the need to restructure the debts the move will not lead to a halt in financial losses in the industry.
The fund says the management of the enterprises must be improved to tackle inefficiencies in the sector.
According to the fund there is ‘the need to tackle energy sector inefficiencies, particularly improving the management of the state‑owned enterprises (SOEs).
Ongoing debt restructuring efforts are helpful but are no substitute to stemming the SOEs’ financial losses’.
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By: Vivian Kai Lokko/citibusinessnews.com/Ghana
