‘Dumsor’ due to “liquidity challenges” – Think tank counters govt's explanation

The Institute for Energy Security (IES), a think tank in the African energy sector, wants the government to come clean on the cause of the current intermittent and unannounced power outages across the country.

IES said Monday in a press statement that, contrary to the explanation by Energy Minister, John Peter Amewu, that the power cuts, popularly called ‘dumsor’, are due to localised faults, huge debts in the sector is to blame.

Mr Amewu said at a press conference on Monday that part of the reason for the intermittent power cuts is due to gas supply challenges to Karpower, a power barge. However, IES said this explanation is backed by facts.

Photo: John Peter Amewu

To be charitable, the explanations offered by the Minister of Energy during the Press Conference is misleading and half-truth,” the energy think tank countered.

“… [w]hat Ghanaians are experiencing is largely due to liquidity challenges in the power sector as heavily-indebted Electricity Company of Ghana (ECG) is unable to redeem its debt obligations to especially Independent Power Producers (IPPs); leading to Power Plants fuel procurement challenges and load shedding,” IES said in the release.

This assessment by IES aligns with the Minority’s evaluation of the situation.

Minority Spokesperson on Energy, Adam Mutawakilu, said had the government not had liquidity challenges, it would have been able to purchase crude to address the issues.

Buttressing its position, IES states, “for the year 2018, there was a projected thermal generation of 11,301.65 GWh and a projected fuel cost of Ghc4.7 billion (US$1.0 Billion). Despite the biting debt on the Volta River Authority (VRA)’s books, in the 2018 Power year, they are required to cough out Gh¢1.57 billion representing 33.57% of the cost while the remaining Gh¢ 3.13 billion representing 66.43% will be required by the Independent Power Producers.”

Ghanaians are dreading a return to the dreaded load shedding era of 2013 which frustrated economic activities and homes for close to three years.

dumsor dumsor

The government has meanwhile assured that Ghana will not return to that era because it is making progress with efforts to address the temporary challenge in the energy sector.