Business News of Tuesday, 24 January 2017
Ghana’s unyielding energy sector challenges can only be surmounted with a proper financial management of the power delivery value chain, says Boakye Agyarko, minister-designate for Energy.
The minister-designate has promised to move the country from the current state of erratic power cuts (dumsor) to a steady state of power supply and eventually to “the ideal state of uninterrupted power delivery.”
Mr Agyarko gave the assurance during a hard-hitting session of questions from members of the Appointments Committee of Parliament, Monday, that was vetting his competence to bring respite to the troubled energy sector.
Mr Agyarko’s ministerial portfolio is critical to the competency of President Nana Akufo-Addo’s administration, who had campaigned on ending the power challenges of the country.
Over ten years of unreliable power supply has had severe consequences on consumers culminating in the issue becoming key during elections.
The Energy minister-designate flaunted his deep knowledge of the sector to the admiration of audience at the auditorium.
He received applause after the more than two-hour tough vetting process, although the rules of Parliament frown on applauding a ministerial nominee during the vetting process.
“In trying to end dumsor, we have to improve the financial management and structuring within the energy sector and that is what I commit to do,” he said.
Mr Agyarko says this strategy is critical to the energy challenge because of what he terms “a debt merry-go-round” in the power delivery value chain.
He said the operations of power producers (the Volta River Authority – VRA and Independent Power Producers – IPPs), the Ghana Grid Company (GRIDCo) and power distributor, the Electricity Company of Ghana (ECG) are limited because they all owe huge debts and are in turned owed.
“ECG is not able to collect [debt from power consumers] to pay GRIDCo, GRIDCo, therefore, is not able to pay the power producers, the power producers are not able to pay for crude, therefore, it limits their ability to generate power,” he observed.
The problem with dumsor in is not a technical problem but a financial problem, he stressed.
The cash-strapped sector, he notes, is the reason about 45% of the country’s installed energy capacity is lying idle and with coupled poor maintenance of facilities, the inevitable can only be the perennial power challenge the country faces.