Government has announced plans to drastically reduce electricity tariffs next year. The proposal is however yet to be approved by the Public Utilities Regulatory Commission, PURC.
The promise which was first disclosed by the president is intended to reduce the burden on consumers and also offer some reprieve to industries as part of a broad programme to boost the private sector.
According to the proposal as announced by Finance Minsiter, Ken ofori Atta, residential and non-residential electricity consumers in the country will enjoy a 13% reduction in tariff beginning January next year.
Additionally, other composite charges in the tariff build-up of electricity have been reduced by the government.
During the presentation, the Minority heckled him shouting ‘419, 419’ especially when government had already created the impression the tariffs have been reduced but the Minister suggested the proposal is subject to PURC’s approval.
The reductions in electricity tariff as contained in the 2018 budget are as follows; Residential – Up to 13%, Non Residential – 13%, Special Load Tariff- Low Voltage – 13% ,Special Load Tariff -Medium Voltage – 11%, Special Load Tariff -High Voltage – 14%, High Voltage Mines – 21%.
Government also intends to aggressively pursue the national LPG promotion policy in order to streamline the sector.
Finance Minister Ken Ofori-Atta in presenting the 2018 budget assured that government is on course to defray the huge debt in the energy sector. He said this in the long term when cleared will free space for the financial institutions and gradually make electricity more affordable.
He described the 4.7billion cedis raised as a success and the highest in West Africa.
Mr Ofori-Atta said as indicated in the Mid-Year Fiscal Policy Review, government planned to restructure the debt of the energy sector SOEs by leveraging the Energy Debt Recovery Levy component of the ESLA.
The SPV established a bond programme to issue Cedi-denominated medium-to-long-term amortising bonds on the back of ESLA receivables to repay legacy debt to the tune of up to GH¢10,000.00 million, he said, adding: “The first tranche of bonds issued under this programme, comprised a 7-year (GH¢2,408.60 million) and a 10-year (GH¢2,375.35 million) bond with coupons of 19.0 percent and 19.5 percent respectively, for a total of GH¢4,783.97 million.”
“The proceeds from the bond issuance has helped reduce Non-Performing Loans within the banking sector and strengthened the balance sheets of the SOEs in the energy sector. To date the stock of energy sector debt has been almost halved.
E.S.L.A Plc will continue to issue bonds to completely pay off the legacy debts,” Mr Ofori-Atta noted.
“Ghana’s energy bond is the highest in West Africa and accrued GH¢4.7 billion.”