Pulse Business gathers that under this arrangement the PURC will guarantee that the utility companies will redeem all the monies owed the banks.
The Public Utilities Regulatory Commission has made an arrangement to help Utility providers like the Volta River Authority and the Electricity Company of Ghana clear their heavy indebtedness to banks.
The Volta River Authority has found it increasingly difficult to borrow from banks to buy crude oil and other materials to power some of the country's power plants due to the energy provider's heavy -indebtedness to these banks.
Case in point is when the VRA had to shut down its Tema Plant because it couldn't afford the 1.3 billion dollars needed to keep the plant operational.
The company had borrowed 1.3 billion dollars from banks so far to power the plant. But banks have now refused to grant the Authority letters of credit to finance the purchase of crude oil.
In light of this, and many of such situations arising from the debts owed by the utility providers, the PURC has agreed to act as mediators on behalf of the energy providers in raising the necessary funds to run.
Pulse Business gathers that under this arrangement the PURC will guarantee that the utility companies will redeem all the monies owed the banks. This means that the PURC will administer all revenue accruing to the utility companies in order to ensure that the banks are paid accordingly.
This is supposed to give financial institutions a renewed confidence in lending to the utility companies once again.