Defray VRA, ECG debts with bonds - Fred Asamany

A power plant developer, Fred Asamany is advising government to consider issuing bonds to defray debts owed to the utility companies.

The companies are said to be facing very serious financial challenges largely due to huge debts caused by government and private customer’s non-payment of bills and subsidies.

Government for instance is reported to owe the ECG about 500 million dollars which has primarily affected investments into the sector.

Speaking to Joy Business, Mr Asamany said government must first ensure the balanced sheets of these companies are clean.

“The issue that these companies faced is that they are constrained by their balanced sheet [because] the tariff that we have in Ghana, believe it or not, does not meet the cost of generation, it also does not meet the cost of distribution.

“So how can they finance their operation when they are not first of all covering their basic operation cost?”

He is however urging a closer collaboration between industry and private power producers to ensure dedicated generation assets.

Meanwhile, the Volta River Authority has indicated it will issue a 500 million dollar corporate bond later this year to finance infrastructure projects.