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Energy Crisis Gov’t must ensure VRA’s books are improved before going to GSE

The Director of Research and Policy at the Institute for Energy and Climate Policy, Dr Philip Adom in an interview with Accra-based Citi FM said investors will not put money in the VRA if the liabilities outweigh the assets.

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The Institute for Energy and Climate Policy has cautioned the government of Ghana to ensure that the financial books of the Volta River Authority (VRA) is improved before it is listed on the Ghana Stock Exchange(GSE).

The Director of Research and Policy at the Institute, Dr Philip Adom in an interview with Accra-based Citi FM said investors will not put money in the VRA if the liabilities outweigh the assets.

“If you look at it from the broader perspective, yes it is good, good in the sense that once they are listed on the stock exchange people will invest in it. So in terms of the financial position we are likely to see a very improved energy sector but then there is very big ‘but’ the big ‘but’ is that currently, the financial status of these utility companies are very bad,” he said.

READ ALSO: Producer Inflation drops to 3.1 percent in January 2017

“So one would actually ask, what will move a private person to invest his capital in this industry should they finally be listed on the stock exchange. How do we ensure that we as a country we improve on the financial stands of the utility companies. That is where the realistic tariffs come in.  Unless government says that for now, they have plans to redeem all VRA’s debt. It will be difficult to convince investors,” he added.

President Nana Akufo-Addo during his State of the Nation Address on Tuesday, February 21, 2016, said the government may list some state-owned power companies on the bourse.

READ ALSO: Textile workers to hit the streets on March 9

The president further disclosed that the energy sector is indebted to the tune of 2.4 billion  U.S dollars. The announcement has sparked some debate among the public.

But Dr Adom said investors are careful of what they put their funds into because they are interested in the returns they will get.

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