By CHRISTIAN KPESESE – The Electricity Company of Ghana (ECG) Limited has secured and amount of $80, 000,000 for the procurement of 60,000 prepaid metres and accessories for distribution to the various Metropolitan, Municipal and District Assemblies in the country.
The move is expected to significantly improve the collection of revenue to enhance operational efficiencies of the company which has been bedeviled with huge indebtedness in recent times.
Parliament unanimously approved the Credit facility agreement between the Government of Ghana and CAL Bank for the assessment of the money.
A Deputy Minister of Finance, Hon. Casiel Ato Baah Forson on behalf of the sector Minister on Tuesday, 21st June, 2016 in accordance with Article 181 of the 1992 constitution presented the request to parliament and the Speaker of the House in accordance with Oder 169 of the Standing Oder of Parliament referred the request to the Finance Committee of Parliament for consideration.
Chairman of the Finance Committee James Klutse Avedzi who presented the committee`s report before its adoption emphasised the importance of the facility which would improve upon revenue collection in an upfront manner, eliminate indebtedness and system loses due to theft and connection challenges by the National power distributor for the economic development of the country.
He noted that the facility will improve Network System Reliability through rehabilitation, expansion, upgrade and re-enforce the company`s network and make it more responsive consumer needs. Members of Parliament expressed various sentiments about the loan facility.
A Ranking Member for the Committee and MP for Old Tafo Hon Akoto Osei expressed worry about the Libor plus 7.5% interest rate which he said was too high.
He expressed reservations about the public and governments` indebtedness to ECG which is also plagued with much debt to the Volta River Authority, GRDCo and others.
Hon Akoto Osei was hopeful the procurement of the prepaid metres will contribute to raise enough revenue to enable to the company and pay its debts.
The financial terms of the US $ 80,000,000 facility which has one year grace period before the starts of repayment includes; an interest rate of 6 months Libor plus 7.5% per anum, five years repayment period, a commitment fee 1.00% per anum on the undisbursed amount.
Other terms include; 0.50% flat of facility amount as participation fee, an arrangement fee of 1.0% flat of facility amount and government guarantee.
Ghana has been confronted with a myriad of power challenges mainly due to inadequate generational capacity.
The procurement of the smart prepaid metres forms part of Government`s investments efforts to address the challenges facing the power sector in areas of generation, transmission and distribution.
Government in recent times invested in the following generation projects that includes; 110 Megawatts (MW) TICO expansion, 350 MW Cenpower project, 190 MW Amandi, 360 MW Jacobsen, 250 MW Ameri and the Emergency power barges among others.
