Cal Bank loans ECG 80 million dollars

Cal Bank loans ECG 80 million dollars

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Parliament has approved the Credit Facility Agreement between the Government of Ghana and Cal Bank Ltd. for an amount of Eighty Million United States Dollars ($80,000,000.00) for the procurement of smart prepaid meters and accessories for the Electricity Company of Ghana (ECG).

The loan is to help improve the financial sustainability of ECG through improved revenue collection and system losses reduction. The intervention will also improve the Network System Reliability through rehabilitation, expansion, upgrade as well as network re-enforcement to make ECG more responsive to quality customer service delivery.

‘As part of Government’s efforts to improve efficiency in the power value chain and solve problems associated with the billing system, the Government of Ghana intends to support the procurement of Pre-paid meters for ECG. This will help achieve increased cash flow for ECG, reduce commercial losses, and eliminate indebtedness of Metropolitan, Municipal and District Assemblies (MMDAs)’, Chairman of the Finance Committee, James Klutse Avedzi justified the request of the loan on the floor of the House.

For his part, the Deputy Minister for Finance, Cassiel Ato Baah Forson explained that the loan facility will be applied for the procurement and installation of prepaid meters for MDAs/MMDAs. He added that though MDAs and MMDAs are required to allocate funds in their budgets to pay their own utility bills, some state institutions fail to comply, adding that their bills therefore become contingent liability on Government.  The Deputy Finance Minister intimated that the provision of the prepaid meters will therefore ensure upfront payment of energy consumption by all state institutions thereby reducing the indebtedness of the state to the electricity company.

The Loan Facility Agreement between Ghana’s Government and Cal Bank is expected to mature in six (6) years.

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