ECG, VALCO Owe GRIDCo Millions In Unpaid Debt
Debts owed by the Electricity Company of Ghana (ECG) and the Aluminium Company Limited (VALCO) to the Ghana Grid Company Limited (GRIDCo) are negatively affecting the operations of the company, the Chief Executive Officer of GRIDCo, Mr William Amuna, has said.
While the ECG owed GRIDCo GH¢339.695 million, VALCO owed it $17.558 million as of December 31, 2015.
Mr Amuna, who made this known at the annual general meeting of the company in Accra yesterday, said the high indebtedness had resulted in liquidity challenges affecting the operations of the company.
Although GRIDCo recorded a good financial performance, with total revenue of GH¢472.345 million and net profit of GH¢44.797 million in 2015, he said most of its profit was in debt.
Compared to 2014, GRIDCo achieved a net loss of GH¢41.50 million.
While a number of critical projects of the company had stalled, Mr Amuna said, financial obligations to financiers, suppliers and service providers, contractors, among others, also delayed as a result of financial constraints.
“The financial state of the company has resulted in increased payables and receivables and deterioration in GRIDCo’s working revenue,” he added.
The indebtedness of the ECG and VALCO, coupled with the depreciation of the Ghana cedi and the shortfall in power supply, he said, were some of the challenges that worsened the company’s financial state.
In spite of the financial constraints, Mr Amuna said, management of the company remained focused on pursuing debts owed by defaulting customers, while austerity measures had also been introduced to manage the challenges.
Concerning the company’s operational performance for the year 2015, he said transmission losses recorded in 2015 were 3.79 per cent, compared to 4.32 per cent in 2014.
He further attributed the appreciable drop in losses to some projects such as replacement of obsolete equipment with modern and more effective ones and the installation of new transformers.
He said the company was looking forward to the future with hope and determination, adding that: “GRIDCo fully supports the government’s vision of making Ghana a net exporter of power by 2020.”
Energy sector wide approach
The Deputy Minister of Power, Mr John Jinapor, in his remarks, indicated that the government had adopted the energy sector wide approach which involved consolidating all debts by the power sector to pay them off.
Although he could not give the quantum of debts owed by the companies, he said the were being consolidated to enable the government to clear them within a period of three to five years from collections from energy sector levies.
Already, he said, an upfront payment of approximately GH¢250 million had been made to some banks that the companies owed.
The deputy minister commended GRIDCo for its critical role in the power sector, especially during the load-shedding period, and urged the workers not to relent in their efforts but continue to work hard for the country.
The Board Chairman of GRIDCo, Alhaji Huudu Yahaya, in his report, said: “The under-capitalisation of the company, the cost of financing and directives on the various financial requirements place the company in a vulnerable position and need to be addressed”.
He said the government’s efforts at addressing the liquidity problems in the power sector would go a long way to release funds for GRIDCo to execute its critical projects that would make the national transmission system robust and improve reliability of power supply.
GRIDCo, he said, was working with 12 prospective entrants to the renewable energy grid sector, while it was also working to commercialise part of its fibre optics to boost telecommunications in Ghana and within the sub-region.