Dr. Ishmael Ackah, Executive Secretary of the Public Utilities Regulatory Commission (PURC), has refuted worries that the recent 6.56% reduction in electricity tariffs for specific customer categories will exacerbate the debt in the energy sector.
On Monday, March 4, the Independent Power Producers Ghana (IPPs) expressed significant concerns about the country’s power sector nearing a critical threshold.
The Chamber cautioned that by the conclusion of 2024, the sector might amass an extra debt of about USD$1.8 billion, owed exclusively to the IPPs.
This potential increase is linked to the PURC’s recent decision to further lower electricity tariffs, a move made against the backdrop of rising variable costs related to electricity production.
Although the decision is intended to ease the financial burden on consumers by lowering tariffs, it is anticipated to increase the financial strain on Independent Power Producers (IPPs), potentially resulting in a significant uptick in sector debt.
However, in a statement issued on March 5th, Dr. Ackah emphasized that the PURC is mindful of the financial sustainability of all utilities and consumer welfare.
He elaborated that tariff hikes do not necessarily translate to a reduction in energy sector debts or guaranteed payments to IPPs. Instead, distribution companies must first collect the approved tariffs before any payments can be disbursed to the IPPs.
“The public should dispel misinformation that the few customer groups that witnessed a reduction in the tariffs will consequently compound the debts in the energy sector” he said.
