"Dumsor" is due to the Sector's high indebtedness - ACEP

The Executive Director of the Africa Center for Energy Policy, ACEP, Ben Boakye, has explained that the country’s current energy challenges resulting in "dumsor" is due to the sector’s high indebtedness.

According to him, the many power contracts and agreements entered into in the past, had left the sector in dire financial challenges making it difficult to operate efficiently.

According to Ben Boakye in an interview with Citi News Monitored by Prime News Ghana, he said for past few years, governments have been consistent in increasing debts to the sector due to their failure to properly assess proposed contractual agreements before entering into them.

“The power sector is living on steroids because the fundamentals haven’t shifted much. We had a crisis and moving out of the crisis we were just signing PPAs, contracts without a careful projection of what the real demand is. If we have excess beyond what we need, that becomes a debt on us. We kept signing and now we have the PPAs maturing,” he said.

He indicated that the Electricity Company of Ghana (ECG) was the most indebted agency within the sector with a debt of almost $1 billion as of July 2018.

“We have to address the fundamental cause. The power sector is on steroids because we haven’t stopped creating the debts. If you check ECG’s operation for 2018, documents I’ve sighted showed that first quarter of 2018, they made a loss of almost $1 billion. If they are making losses, they are not able to pay. and if they are unable to pay then the generator will have to call on the one who owns the contract that is government and government will have to get money come and pay. So if we don’t solve that problem then we’ll have to use our taxes at a point to pay the generators''.

READ MORE: Stop the noise on just one-week of dumsor - Dep. Minister for Energy to NDC

There are renewed conversations on the state of the country’s energy sector following recent power cuts just as the over 2-year long power challenges experienced some years ago popularly known as dumsor.



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