ECG Declares GH¢625.34m As Bad Debt

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Electricity Company of Ghana (ECG) has declared an amount of Gh¢625.34 million (equivalent of $80,668,860) as bad and doubtful debts over the last three years.

Explaining the cause of debt spanning from 2019 to 2021 in a ECG’s 2022-2026 tariff proposals submitted to the Public Utilities Regulatory Commission (PURC) for consideration, sighted by DGN Online, in 2019, ECG made provision for GH¢58.51million as bad and doubtful debts in line with the company’s policy.

However, the figure went higher to Gh¢276.50 million and Gh¢290.33 million in 2020 and 2021 respectively.

“This is based on the company’s policy on provision for bad and doubtful debts,” ECG said.

On what causes the bad debt, the power distribution company, said majority of the bad debt emanates from demolished structures due to road constructions, relocation of slums, removal of temporary structures, illegal transfer and removal of meters by unscrupulous customers (mostly SHEP areas).

In order to avert future occurrences, ECG noted it regularly engages Districts and Municipal Assemblies to ensure that information on demolishing exercises, road constructions, etc. are communicated to ECG in good time to avoid this problem.

ECG however, indicated that despite bad and doubtful debts being part of the company’s policy, the board, for the past 10 years, has not approved them even though the necessary provisions were made in the budgets.

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