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Business News of Saturday, 23 May 2020

Source: Class FM

GH¢2 billion ECG debt clearance given us stronger-than-before balance sheet – MD


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The Electricity Company of Ghana Limited (ECG) has said in a press statement issued and signed by its Managing Director Kwame Agyeman-Budu that it has “noted with great concern some commentary within the public space concerning Government of Ghana’s (GoG) announcement of the payment of its indebtedness to ECG”.

ECG provided some insight and clarification as follows:

• A reconciliation exercise was undertaken by ECG with all its suppliers including VRA and the Independent Power Producers (IPPs) as well as the Ministry of Finance (MoF) for the end of the year 2019, where all forms of “government debt” made up of MDA bills, consumption by Ghana Water Company Limited (GWCL), Government subsidies and shortfall in Public Lighting for the period 2010 – 2019 was reconciled.

• We established that as of the end of 2016, total GoG indebtedness to ECG netting off all government payments was GHS2.63 billion.

• ECG further realised that between 2017 and 2019, GoG averagely paid GHS2 billion directly to ECG’s suppliers (i.e. VRA, IPPs and GRIDCo) to defray GoG’s indebtedness to ECG.

• Total GoG account as of the end of 2019 has a credit balance of GHS 505.8 million.

• Considering the GoG’s average bill of GHS 100 million a month, the outstanding GoG credit of GHS505.8 million is enough to pay its bill for January to April 2020.

• It is also important to add that GoG has also paid an amount of GHS4.14billion directly to various fuel suppliers and power producers and is yet to be credited to GoG’s account under the ongoing reconciliation exercise. Therefore, when the exercise is completed, the amount certified will be a further credit to the GoG account.

• We wish to reiterate that the payments made by GoG were not deposited into ECG's account. Rather, GoG's direct payments to our suppliers have cleared our books of GoG's indebtedness after a successful reconciliation with our suppliers.

• Indeed, this positive intervention by GoG is very well appreciated by ECG because the company’s balance sheet is now stronger than before.

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