GRIDCo’s $141 m debt to be converted into equity

Mr Asamoah Boateng (left) interacting with Joseph Cudjoe (middle) and Kabral Blay-Amihere.

Mr Asamoah Boateng (left) interacting with Joseph Cudjoe (middle) and Kabral Blay-Amihere.

The Ministry of Finance is considering a proposal to convert about US$141 million debt of the Ghana Grid Company (GRIDCo) into equity.

Deputy Minister of Energy, in-charge of Financing and Infrastructure, Joseph Cudjoe, said the move was to give the company a clean balance sheet to be able to attract financial support.

“You know when GRIDCo was carved out of the Volta River Authority (VRA), there was an existing debt regarding transmission which was passed on to GRIDCo. That debt which is still on the books of GRIDCo shows that it is heavily indebted meanwhile it is an inherited debt.

“This disturbs GRIDCo’s balance sheet. What we intend doing is a debt restructuring that will see the Minister of Finance sign off the debt. This will give GRIDCo a clean balance sheet to be able to have engagement with other entities without being seen as heavily indebted,” he stated.

Speaking at the 9th Annual General Meeting of GRIDCo in Accra yesterday, he said the Minister of Finance was yet to indicate to the Ministry of Energy whether the full debt or a part of it would be signed off.

Mr Cudjoe said that part of cash in-flows from the second tranche of the Energy Sector Levy Act (ESLA) Bond, which was issued in 2017 to offset debt within the energy sector, would be used to support projects and activities of GRIDCo when it is opened.

He tasked the company to improve its efficiency to reduce cost of operations, undertake expansion projects and explore ways to extend its expertise and competence to the West African region for enhanced revenue.

As part of efforts to improve revenue generation and help to bridge the digital divide, Board Chairman of the company,  Kabral Blay-Amihere, said GRIDCo in 2017 established a telecommunication service providing firm, GRIDTEL, which was issued a provisional license from the National Communication Authority (NCA) to build and operate a National Terrestrial Fibre Network.

He said the company had connected over 3000 kilometres of Optical Groundwire (OPGW) and more than 60 substations as Points of Presence (PoPs) to pursue its business model of a “carrier of carriers” through the open access approach.

Going forward, Mr Blay-Amihere stated that the board would ensure a consistent investment into the National Interconnected Transmission System (NITS) for a robust and reliable electricity supply.

The Board Chair reiterated GRIDCo’s commitment to work with relevant agencies to identify renewable energy sources and further facilitate their integration onto the national grid.

Mr Jonathan Amoako-Baah, Chief Executive of GRIDCo, said the company recorded a total revenue of GH¢715.2 million in 2017 representing a 6.14 per cent increase on the 2016 revenue which was GH¢673.8 million.

He said the non-payment from its key customers and the inclusion of interest cost of loans contracted for the West Africa Power Pool (WAPP) assets previously in the books of VRA adversely affected the company’s financial performance, resulting in losses of GH¢31 million.

Within the year, GRIDCo, he said transmitted a total of 14.31 Terawatt hours (TWh) of energy on its transmission network with 13.71TWh being local consumption while 0.32TWh was imported from Cote d’Ivoire and 0.13TWh exported to SONABEL, Youga Mines, Burkina Faso and CIE.

By Claude Nyarko Adams

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