Prime News Ghana

Gov't seeks to withdraw GH₵6bn from Consolidated Fund to support energy sector

By Justice Kofi Bimpeh
Finance Minister Ken Ofori Atta
Finance Minister Ken Ofori Atta

Government is seeking to withdraw GH₵6bn from Consolidated Fund to address challenges in the energy sector.

The Ministry of Finance has laid a Supplementary Appropriation Bill, 2020 before Parliament to withdraw money from the Consolidated Fund, through government expenditure for the financial year ending December 2019.

Speaker of Parliament, Prof. Aaron Mike Oquaye has referred the Bill to the Finance Committee for consideration and report after it was read for the first time on the floor. 

Government last year sought approval of Parliament for GH¢ 6 billion to be spent from the consolidated fund to address challenges in the energy sector. This was part of the 2019 supplementary estimates which was not utilised in accordance with Articles 179 (8) and 179 (9) of the constitution.

Power challenges

The Minister for Finance last year unveiled a committee to take responsibility for the consultation process with the independent power producers and gas suppliers as part of efforts to reduce the burden placed on government by several take or pay power purchase agreements among other issues in the energy sector.

READ ALSO : Info. Min. dispels assertion that renegotiating take-or-pay deals will result in judgment debts

Ken Ofori-Atta inaugurating the government-led Energy Sector Recovery Programme Steering Committee, made up of members across various sectors and ministries, said the move is part of efforts to resolve energy issues in a manner that is sustainable for both Ghana and its partners.

Mr. Ofori-Atta presenting the 2019 mid-year budget review to Parliament in July this year, announced the government’s intention to renegotiate several agreements in Ghana’s energy sector, including all take or pay power purchasing agreements; imposing a moratorium on the signing of new power purchase agreements in the energy sector.

“The Steering Committee is of key importance for the future of Ghana’s energy sector and Ghana’s long-term sustainable development government has been working hard to establish a long-term sustainable strategy for a competitive and dynamic energy sector where private investments can thrive, and the interests of the Ghanaian people and businesses continue to flourish,” the Finance Minister said.

ESLA PLC

Government in its quest to resolve the energy sector debt set up the Energy Sector Levies Act PLC (E.S.L.A PLC) in 2017, which primarily is authorised to carry on the following business among others: to issue debt securities backed by receivables collected under the Energy Sector Levies Act, assigned to the Company by the Government of Ghana acting through the Ministry of Finance for the purpose of servicing the debt securities and related expenses.

Also to enter into such other arrangements and transactions in relation to the issuance of debt securities as may be necessary or required by the Government of Ghana acting through the Ministry of Finance.

ESLA PLC in December last year opened a 12-year GHC denominated bond which represents Tranche E4 under the GHC 10 billion bond programme.