Gov’t to issue 15-year local bond to help clear energy sector debts

Business

The Vice President has disclosed that government will soon issue a 15-year bond to help it clear debts in the energy sector.

The country is yet to clear a significant amount of debts in the energy sector despite the introduction of levies to clear the debt.

The Energy Sector Levy was introduced with the aim of clearing the debts of some state-owned enterprises in the energy sector, the Volta River Authority (VRA) and the Electricity Company of Ghana (ECG) being the two main state enterprises facing the debt challenges.

The Akufo-Addo government campaigned during the 2016 elections on the promise to scrap the levies hence the intensification of the call in the wake of fuel price increases.

Dr Mahamudu Bawumia speaking to JOYBUSINESS at the sidelines of the International Monetary Fund (IMF) and World Bank Spring meeting currently ongoing in Washington DC, said although the ESL is dealing with all the liabilities of the State Owned Enterprises (SOEs) government is planning to have one bond which will take care of all the liabilities. 

“Government will service those bonds with the ESL revenue so it is a much neater situation and allows space for our energy companies like the VRAs to have a much stronger balance sheet,” he added.

He believes this will enable those companies to further grow, be able to invest again as well as attract investment again. 

The former Deputy Governor of the Bank of Ghana (BoG) said in the area of energy investment, he has also been speaking about reviewing the Millenium Challenge Corporation (MCC) compact with the U.S government.

“When we got here, we have been trying to renegotiate the concession agreement. As you know the National Democratic Congress (NDC) government as far as concession and ECG are concerned so we have been talking MCC on that matter. 

“We have renegotiated the agreement in the sense to make sure that this concession must have majority Ghanaian ownership. We have insisted on that,” he said. 

Also, he said government has negotiated to have an assurance that there will be no layoffs at ECG as a result of the concession which will be managed by Ghanaians.

“It is good news for Ghana and the energy sector as we have gotten an understanding with the MCC for the three key elements we have insisted on,” he said.  

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