Pay ECG’s debt to avoid ‘Dumsor’ – Edward Bawa tells government.
The Member of Parliament for Bongo, Edward Bawa, has urged the government to intervene as a shareholder of the Electricity Company of Ghana (ECG) and help settle its debts to avoid intermittent power outages popularly known as “Dumsor.”
The call comes after power outages in parts of the country on Thursday, October 26, due to gas supply challenges. The Ghana Grid Company Ltd (GRIDCo) explained that there was a limited supply of gas to Tema, causing a power supply gap of 550MW.
In a statement issued on Friday, Bawa, who is also a member of the Mines and Energy Committee in Parliament, urged the government to quickly make the minimum expected payment of $8.31 million to the West Africa Gas Pipeline Company (WAPCo) to prevent further power outages.
“In the medium to long term, the government must make arrangements to pay the total indebtedness of ECG to WAPCo and immediately reinstate the Cash Waterfall Mechanism,” Bawa said.
“This is because very soon the IPPs will also be on the neck of ECG for their accumulated arrears and the government must be in readiness to intervene to avoid DUMSOR. The time to act is now,” Mr Bawa stated.
He explained that as part of the Gas Transportation Agreement between ECG and the WAPCo to transport gas from Aboadze to power plants in Tema, WAPCo demanded that the government put up a guarantee against failure by ECG to pay for gas transportation.
“This was because WAPCo was wary of the financial challenges of the power off-taker and were thus unsure they would be paid anytime ECG was invoiced. The government elected the Ghana National Petroleum Corporation (GNPC) to serve as the guarantor. It was therefore not surprising that when ECG defaulted in its payments WAPCo wrote letters to the guarantor for payment,” he added.
Mr Bawa said the GNPC subsequently wrote a series of letters to ECG regarding the non-payment of transportation invoices to the WAPCo telling the ECG about WAPCo’s intention to suspend gas transportation services on the 17th of October 2023 if the minimum expected payment of $8.31 million was not paid by the close of business 17th October 2023.
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“The total cumulative outstanding invoices currently stand at US$17.13 million after GNPC paid an amount of $2.00 million. All attempts to get ECG to make the required minimum payments have been unsuccessful. So yesterday WAPCo carried out their threat and curtailed the flow of gas from the Western Region to Tema hence the limited supply gas to the Tema enclave causing a supply gap of 550MW at peak time,” he stated.
