COVID-19: Electricity subsidy to cost GHS1bn – Energy Minister

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An amount of GHS1 billion will be spent on subsidizing electricity cost for Ghananins during the lock down in some parts of the country following the COVID-19 outbreak, Energy Minister, John Peter Amewu, has revealed at a press conference in Accra on Thursday April 16.

President Nana Akufo-Addo, as part of measures to mitigate the effect of the COVID-19 announced a reduction in electrcity bills.

The president said last week that: “As part of measures to mitigate the effects of the pandemic on the social and economic life of the country, we have decided on further measures of mitigation for all Ghanaians for the next three months, i.e. April, May and June”.

The government, he said, “will fully absorb electricity bills for the poorest of the poor, i.e. for all lifeline consumers, that is free electricity for persons who consume zero (0) to fifty (50) kilowatt hours a month for this period. In addition, for all other consumers, residential and commercial, Government will absorb, again, fifty percent (50%) of your electricity bill for this period, using your March 2020 bill as your benchmark. For example, if your electricity bill was one hundred cedis (GHS100), you will pay only GHS50, with Government absorbing the remaining fifty cedis (GHS50). This is being done to support industry, enterprises and the service sector in these difficult times, and to provide some relief to households for lost income. Nevertheless, I urge all Ghanaians to exercise discipline in their use of water and electricity”.

Providing the cost implications of the tariff absorption on Thursday, 15 April 2020, the Energy Minister said about 87 per cent of Ghanaians who are connected to the national grid through 4.8 million metres,would enjoy the intervention, which is estimated to cost the nation “approximately” GHS 1 billion.

Mr Amewu told the press at the Information Ministry auditorium that absorbing the tariffs for the one million active lifeline consumers of the Electricity Company of Ghana (ECG), representing about 27.4 per cent of its total clientele, would cost the state GHS8.5 million.

For the non-lifeliners, of whom 2,780,886 are residential consumers and 1,608 special load tariff consumers, Mr Amewu said: “A 50 per cent discount on their electricity bill will translate into GHS 235.4 million per month”, adding: “The total reliefs for ECG customers per month are, therefore, GHS 244 million.”

So, for the three months, the state would spend GHS732 million to cover the bills of all ECG customers.

As far as the Northern Electricity Distribution Company (NEDCo) is concerned, Mr Amewu said: “The total government relief for all customers is about GHS 47 million or GHS 141 million for the three-month period”.

The 500,069 lifeline customers of NEDCo will guzzle GHS 10.9 million per month in terms of reliefs while GHS 36 million per month would be spend on the 369,000 non-lifeliners.

For the entire three months, the government estimates to spend GHS55.5 million per month – that’s a total of GHS 166.4 million on the state-run Volta River Authority. That package covers 12 of its customers which are miners at GHS 42.4 million per month or GHS 127.2 million.

Furthermore, the relief for smelter Volta Aluminum Company (VALCO) will be GHS 4.8 million per month or GHS 14.4 million for the three months while manufacturers such as Aluworks, Diamond Cement Limited, Savannah Cement Limited and Enclave Power Limited will benefit from GHS 7.9 per month or GHS 23.7 million for the three months.

Source: Laudbusiness.com/Ghana

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