Deputy Minister for Energy in Charge of Petroleum, Dr Mohammed Amin Adam has said government has injected liquidity support of Gh¢4million into Electricity Company of Ghana (ECG) to keep it afloat.
The sector minister said the support was made after government settled all of its indebtedness to ECG, including the GH¢ 2.63 billion it inherited on assumption of office.
He noted that as of December 2016 the state owed ECG Gh¢ 2.63 billion.
According to him, government ensured it was current on all bills incurred from 2017.
Speaking at an event dubbed ‘The Energy Manifesto Town Hall ‘ organized by the Chamber of Bulk Oil Distributors (CBOD) and its partners, Dr Amin Adam said the payments formed part of government’s efforts to address the woes of the sector.
“We have paid government indebtedness to ECG of Ghc2.63billion. We have even paid ECG an extra Ghc4million as a way of injecting liquidity into the operations of ECG for it to perform better,” Dr Amin stated.
Implemented Cash Waterfall Mechanism to save ECG from accumulating new debts
The sector minister noted that since April 2020 government has implemented the Cash Waterfall Mechanism (CWM) to save ECG from accumulating new debts.
Dr Amin said the CWM is a policy that ensures continuous flow of liquidity to all the players along the value chain.
“We promised to implement the Cash Waterfall Mechanism (CWM). We have started implementing the cash waterfall mechanism as of April 2020. The mechanism is just to ensure that all monies collected by ECG are distributed to all the players along the value chain such that you have regular cash flow and also prevent further accumulation of new debts,” he emphasised.
Implemented Reverse Gas Flow to keep our lights on
According to Dr, Amin Adam, government has completed and implemented the reverse gas flow that allows it to utilise stranded gas in the West to fire the thermal plants.
He added that the policy culminated in the relocation of the Karpowership to Takoradi in the Western Region where a lot of free gas was sitting unused.
The minister indicated that the relocation of the power plant to the west help reduced the dependency on fuel that the previous NDC administration struggled to raise money to purchase at the time gas supply from Nigeria was not forthcoming which eventually plunged the entire country into total darkness for almost four years.
“In keeping the lights on, a number of measures were implemented by the NPP by ensuring regular availability of fuel, utilisation of reverse gas flow. When dumsor hit the NDC, it took the World Bank to suggest to the government at the time the need to resort to the reverse flow of the gas because we had so much gas stranded in the West and yet you have power plant sitting in the East struggling for fuel to operate.
“The NDC rather decided to buy fuel which they could not find the money but if they had used the reverse flow of gas that could have saved them the money they struggled to raise to buy the fuel and will certainly have not plunged the country into total darkness. It took President Akufo-Addo to come and do the reverse flow which now allow us to flow that stranded gas from the West to East to be used by the power plants that has saved the country from dumsor.
“The NPP relocated the Karpowership plant to Takoradi to allow us flow the free gas in the West. so we didn’t understand why a plant like that which is mobile could not be moved to the West to flow the stranded gas but had to be stationed in Tema and the government of NDC had to be struggling to buy fuel to operate,” he intimated.
These, Dr Amin Adam said, are part of the numerous policy interventions that the NPP government implemented to end dumsor since it took over power from the previous NDC government.