The Ghana National Gas Company (Ghana Gas) has revealed that, debt owed the company by the Volta River Authority is affecting its operations. This was made known at a press conference on Monday at the office of Ghana Gas to welcome an escrow account for the energy sector.
According to Ghana Gas, the US$735 million owed the company by VRA is affecting its operations, because it forms 90% of its clientele. The debt was incurred as a result of VRA’s inability to pay for gas supplied to power its thermal plants.
Despite the accumulated debt affecting operations at Ghana Gas, Head of Finance at Ghana Gas, Emmanuel Essel has disclosed the company will not halt supply to VRA, though some industry players have suggested so. the decision according to him, is to prevent the country been plunged into power crisis. “We don’t think we will cut supply to VRA,” he explained, adding that government has shown commitment in reducing the debt from over US$ 900 to US$ 735.
The energy sector escrow account, dubbed the ‘Cash Waterfall Mechanism’ is expected to ensure among that, all suppliers of goods and services to companies in the energy sector are paid by a third-party and as well end the accumulation of debt in the sector. The move, according to the company will also resolve the situation whereby companies mount – up debts and pay as they wish.
Lauding the initiative by government to create an escrow account for the energy sector, Chief Executive Officer (CEO) of Ghana National Gas Company, Dr. Ben Asante hinted that, the mechanism will ensure that, all suppliers of products and services to companies in the sector are paid promptly.
Dr. Asanted intimated that, “the waterfall mechanism essentially has all the receipts that are coming down the value chain of the power sector going to one escrow account. Then, whoever has supplied either services or fuel, you will be paid from that escrow. So, we don’t have any government entity holding the entire purse and giving money out when and as they see fit; it is going to be managed by a third – party.”
Dr. Asante also noted that, the use of processed gas from Atuabo Gas Processing Plant for power generation in place of light crude oil yielded an average saving of about US$42.6million as compared to US$38.6million in 2015. In addition, he mentioned, the rise in the savings, was due to a 43% increase in the price of light crude oil at US$84.7 per barrel from US$59.3 per barrel in 2017.
Moreover, the company as of last year supplied 40% of domestic Liquified Petroleum Gas (LPG) demand, making it the highest since it began commercial operations in 2015, and reducing the country’s LPG import bill by US$47million.
Commenting on Corporate social responsibility activities of the company, he mentioned that, Ghana Gas registered 1,350 people under the National Health Insurance Scheme (NHIS) for residents in Atuabo; and constructed an 8 – seat water closet toilet and mechanised boreholes in the Allabokazo community.
In education, the gas company constructed a four – unit teacher’s quarters in the Anokyi and Asemnda Suazo communities. It also constructed an ultra – modern nursery facility at Asemnda Suazo and in sports, the company made cash donations to Karela United and the Nzema Kotoko football clubs.