President of the African Development Bank, (AfDB) Akinwumi Adesina has pledged the Bank’s commitment to provide government with significant support to clear its energy sector debt.
Mr. Adesina underscored that the perennial challenges that have confronted the country’s power sector, require robust measures to fix them permanently.
He disclosed this when he paid a courtesy call on President Nana Akufo-Addo to deepen the bilateral relationS between the AfDB and Ghana.
He said: “We have agreed to provide significant support to the energy sector. Ghana has a particular term which has entered the dictionary today called the “Dumsor” which is about power outages. There is no way that Africa can develop without power. An economy without power really cannot go far.”
According to him, the bank is willing to help improve liquidity profile of the energy companies facing severe financial distress in Ghana.
“I assure the president that the African Development Bank will play a big role with how to reschedule some of those loans and also how to help them in improving the liquidity profile of the energy companies that we have here thus, the ECG and the Volta River Authority” Mr. Adesina added.
Already some financial institutions in the country have indicated their readiness to buy into the energy sector bond yet to be released by government later this year after Vice President Dr. Bawumia announced plans to issue a 15-year bond to clear the 2.4 billion dollars debts.
Mr. Akinwumi Adesina who promised to help the country’s energy sector back on its feet also acknowledged the President’s efforts in cleaning up the country’s debt.
“I want to salute the efforts of the government of Ghana in trying to clean up a lot of the debts that are actually in that particular sector.”
As at the end of 2016, the net debt to banks and fuel suppliers by the state amounted to US$1.3 billion.
A further breakdown also showed that the banks are owed US$782 million, while fuel suppliers are owed US$440 million.
State owned power producer, the Volta River Authority (VRA) also owed the banks to the tune of US$782 million.
VRA also contributed US$278 million to the US$440 million owed fuel suppliers, while TOR contributed US$162 million.