Business News of Wednesday, 22 February 2017
The Former Minister for Power, Dr. Kwabena Donkor, has said government’s plan to list the Ghana Grid Company Limited (GRIDCo) on the Ghana Stock Exchange would be an unnecessary misstep for the country.
Government is considering listing GRIDC0 on the stock exchange to make the energy sector more efficient and solve the funding challenges facing power companies, but Dr. Donkor insists that such a move “will be most unfortunate”.
“Whoever is advising the government will be doing the country a disfavour,” he stated on the Citi Breakfast Show.
President Nana Akufo-Addo, during his maiden State of the Nation address, announced that “GRIDCo, along with the Volta River Authority (VRA), will be listed on the Ghana Stock Exchange as part of a master plan to strengthen the power sector and open competitive bidding for power capacity procurement, thus reducing the cost of power projects and ensuring value for money.
President Akufo- Addo added that this will also form part of government’s plan to tackle the $2.4 billion debt of which he said an “alarming” $800 million was owed to local banks.
GRIDCO profitable as it is
Dr. Donkor, however, argued against the move saying GRIDCo was profitable, whilst noting that there also security implications to listing the company on the Ghana Stock Exchange.
“GRIDCo is the nerve centre of the power system. GRIDCo is the brain. GRIDCo is profitable. GRIDCo is a limited liability company owned solely by the state. If has recorded profits in the last couple of years an so why would you put your brain on the stock exchange,” he questioned.
Dr. Donkor also said “GRIDCo is not only a commercial entity, it is a strategic entity. In fact, in some countries and in some jurisdictions, you don’t even have the grid company on GPS [or on the map] because it is considered a major security [installation],” he explained.
If the enlisting on the stock exchange is to ensure value and revenue, government can continue to rely on the energy sector levy, the former Power Minister noted further saying, “the levies are enabling us to pay off the debt.”
Dr. Donkor, whilst acknowledging the problem of the indebtedness, also said the figure of $4.2 billion was an overstatement given some of the money owed is within the countries power sector.
“Some of the debts are intra-sector; ECG owing GRIDCo and therefore GRIDC0 probably owing some other entity, so if you do the cross checking, it comes to about $1.2 billion,” he explained.