SOE Indebtedness has reduced – Mr. Mark Assibey Yeboah

Chairman of the Finance Committee and the Honourable Member of Parliament for New Juaben South Constituency, Dr. Mark Assibey-Yeboah in the committee’s report informed the House that there has been a reduction in the debts owed by State Owned Enterprises (SOEs)

He stated that due to the utilisation of the Energy Sector Levies Act (ESLA), proceeds together with the insurance of the Energy Bond has resulted in a reduction of liabilities of SOEs in the energy sector by over 40% at the end of 2017.

He indicated that out of a total legacy debt of GH₵9,393,512,841.22, an amount of GH₵3,960,636,357.75 was said to have been paid as at 31^st of December, 2017.

He further added that the ESLA gives a reprieve to the energy sector and the creditor financial institutions to enable them function more efficiently.

The Chairman again said that payment of the legacy liabilities of SOEs operating in the energy sector is not a sufficient approach to solving the challenges confronting the sector.

He noted that “vigorous restructuring exercise of the SOEs is currently ongoing to return these institutions to a path of profitability and operational viability. The restructuring exercise of the SOEs was said to include the implementation of a cash waterfall mechanism and a monitoring regime to ensure that the entities do not lapse into the same debt ridden trap in the future”.

In the Finance Committee’s report, the total indebtedness of the Volta River Authority (VRA) as at 31^st December, 2017 stood at an equivalent of US$ 1.2 billion. This was said to exclude GH₵2.05 billion paid out through the ESLA bond arrangement.

Electricity Company of Ghana (ECG) stood at a total indebtedness of GH₵2.9 Billion as at 31^st December, 2017. This includes an amount of GH₵1.2 billion owned to Simon Asogli, GH₵690 million owed to GRIDCo and GH₵500 million owed to Bui Power Authority. The rest of the debt was said to be owed to VRA, Karpower and some independent power producers.

The report also stated that at the end of 2017, GRIDCo’s total outstanding liabilities amounted to about GH₵700 million and was owed principally to Public Utility Regulatory Commission (PURC), VRA and other suppliers.

Source: GhanaJustice/S.Ayisi