Gov’t, WAPCo reach agreement to settle $20m debt for gas supply


The Government has reportedly reached a tentative payment plan with the West African Gas Pipeline Company (WAPCo) to settle the state’s $20 million debt.

WAPCo had shut off gas supply needed for power generation, leading to power outages in parts of the country, with the Ghana Grid Company (GRIDCo) announcing a supply gap of 550MW at peak times.

Although an agreement has been reached, it’s important to note that it doesn’t guarantee an immediate restoration of gas supply from Takoradi to Tema, which means that some power outages may still occur.

The Minority in Parliament has urged the government to promptly settle its debts to prevent the country from experiencing an energy crisis.

Edward Bawa, a member of the Mines and Energy Committee of Parliament, suggested that the government work out an arrangement with WAPCo to resolve the issue. He emphasized the importance of providing WAPCo with confidence that the government will make the necessary payments to ensure a consistent gas supply, as a disruption in gas supply can lead to power plants being unable to operate, resulting in power outages, a situation commonly referred to as ‘dumsor.’

“Government must find a way or make an arrangement with WAPCo as to how that can be paid. If WAPCO begins to have some comfort that government has kept in touch to do the payment, then, I believe that it will work.

“Government must be working to see how they can give WAPCo some level of comfort to continue transmitting gas from Obuasi to Tema or else we are going to be in trouble. If the gas does not come, what it simply means is that the plants cannot run because they use fuel. And if they cannot run, you’d have that ‘dumsor‘,’” he suggested.

Mr Bawa explained that WAPCo had not been paid since January 2023, leading to the accumulation of unpaid bills. The liability for this debt is shared between the Electricity Company of Ghana (ECG) and the Ghana National Petroleum Corporation (GNPC).

ECG was supposed to pay WAPCo, but due to issues with the cash waterfall mechanism, where revenues collected by ECG were distributed among utility providers, ECG was unable to settle its liability to WAPCo and GNPC had stepped in as a guarantor for ECG in this arrangement.

Source: norvanreports

Leave a Reply

Your email address will not be published. Required fields are marked *