Power rationing imminent as GRIDCo reels under huge debt

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Policy think tank Institute of Energy Security (IES) has warned of an impending erratic power supply if government fails to as a matter of urgency address the debt situation at Ghana Grid Co Limited (GRIDCo).

Paa Kwasi Anamua Sakyi, Executive Director of IES, said it is understandable the challenges of the Electricity Company of Ghana (ECG), Volta Aluminum Company Limited (VALCO) and the rest who have been unable to pay their bills to the power transmitting company.

Other companies owing GRIDCo include Volta River Authority (VRA), Great Consolidated Mines, Asogli Thermal Station, Ameri Power Plant, NEDCo, Bui Power Plant, Karpowership among others.

According to him, these companies are also chasing their debts to offset their obligation with GRIDCo.

Joy News has sighted a copy of GRIDCo’s statement of account dated August 17, 2018, which reveals the ECG is one of the major debtors with an outstanding amount of ¢957 million.

Another main debtor captured in the report is VALCO with a debt of ¢29 million. The two companies succeeded in making part payment leaving VALCO with an outstanding commitment of ¢2.5 million while that of ECG stood at ¢253 million.

The two companies are named in another document titled ‘Issues affecting GRIDCos Financial Performance.’ Part of the document said, “current capital ratio for 2014, 2016 and 2017 are 1.85, 1.00 and 0.98. The declining current ratio confirms the high receivables held by ECG and VALCO and weak liquidity support.”

“GRIDCo is also reeling under pressure as a result so we are not surprised at the development,” he told Joy News.

He said it is clear from the foregoing that power distribution company ECG’s inability to pay their bills shows that they also have challenges so both companies will struggle to distribute power as they should.

Should consumers be worried?

Mr Anamua Sakyi said the major challenge the country currently faces in the sector has to do with power distribution.

“Knowing very well that GRIDCo has power challenges in terms of their outdated and inefficient distribution equipment, they will require enough funds to retool themselves and make their system of distribution more efficient,” he said.

The IES boss added, “because of the inefficiency in the distribution network, we have power losses of more than 8% currently. So, there is the tendency that we if they are unable to get their equipment right and retool then, of course, there could be a nationwide blackout.”

He said the Energy Ministry needs to step in as soon as possible to resource the two companies to avert a revisit to the power rationing (‘dumsor’) days again.

Attempts to reach the Energy Ministry on the matter for their response have been unsuccessful as at the time of filing this report.

 

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