Ghana’s energy sector needs audit to ascertain debt levels – COPEC

The Chamber of Petroleum Consumers Ghana (COPEC) is calling for a full-scale audit to be launched into Ghana’s power and energy sector to ascertain the country’s current debt level of the sector.

This comes at a time when the Public Utility Regulatory Commission (PURC) has increased electricity tariff by 18.3 per cent and has since indicated of a further increment any time soon to help defray outstanding debts of the Electricity Company of Ghana.

In an interview with Citi Business News, the Executive Secretary of the Chamber of Petroleum Consumers Ghana (COPEC), Duncan Amoah, questioned the back lock of debts recorded in the power sector.

“One wonders where the monies we all pay through the ECG to be used to pay the services the IPPs have rendered go. Is it really being given to them or they collect the monies then people decide to do whatever they want to do with the money, accumulate back log of debt and then go to call about a certain debt restructuring?,” he quizzed.

“Whatever we are doing as country with the power and energy sector, we would need to probably have a thorough audit because it clearly baffles as there is a conversation of even increasing ECG charges again within a very short period of time”.

Meanwhile, the Independent Power Producers (IPPs) have stated that government’s failure to pay them their arrears will not boost investor confidence.

This comes as the IPPS have declined government’s proposal to restructure about $1.58 billion in arrears owed them by the state.

According to the IMF Staff Report on Ghana, there will be a renegotiation of contracts with the IPPs that are expected to further reduce costs.

The IMF has blamed shortfalls in Ghana’s energy sector on factors including low tariffs and excess capacity amid take-or-pay contracts, which it said had cost the central government some 2% of GDP per year since 2019.