Despite recording a combined loss of GH¢145million in two years, the Ghana Grid Company (Gridco) says it is confident of returning to profit in the near future.
The transmission company says it expects the Electricity Company of Ghana (ECG) to settle its indebtedness to Gridco in the months ahead, as well as the resumption of loan disbursement to it by the Agence Francaise Development (AFD) to boost its operations.
This, when done, according to GRIDCo’s Chief Executive Officer, Jonathan Amoako-Baah, will enable the company to return to profit-making, after it recorded losses of GH¢114.3million and GH¢31.1million in 2018 and 2017 respectively.
“We firmly believe that 2019 will be a better year. We anticipate the commencement of important and major projects, as well as the conclusion of most of our current projects,” Mr. Amoako-Baah said during the company 2018 AGM in Accra.
The loan disbursement by the AFD was suspended after a breach of financial covenants by GRIDCo, leading to the accrual of interest on delayed payments, claims for idle time, and resources from contractors and project duration overruns.
As a result, contractors’ invoices due for payment by AFD for the 330KV Kumasi-Bolgatanga Transmission Line Project were put on hold by AFD.
Additionally, some projects – especially transmission lines projects – suffered delays due to Right-of-Way (ROW) acquisition payment issues and agitation by project-affected persons resulting from delays in compensation payments.
This, he noted, negatively affected projects-implementation, leading to claims for idle time and project duration overruns – thereby resulting in its poor performance in 2018 year.
The CEO also revealed that the company has made a request for government, it sole shareholder, to restructure its books; which, when done, will go a long away to ease the burden on it.
“We believe that if government adheres to our request and ECG is able to come forth by paying all arrears, we will be able to tell a different and positive story in the near future,” he added.
He further explained that various changes have been made to restructure departments to ensure productivity, which are expected to improve performance in the coming years.
In this regard, he said, the Volta Area at Tema was subdivided into Accra Area and the Tema Area to enable efficient supervision of maintenance activities, while the Bolgatanga area was also created to ensure efficient maintenance and operational activities in the northern part of the country.
2018 financial performance
During the year under review, the company recorded a net loss of GH¢114.3million – representing a 268% rise on the loss of GH¢31.1million recorded in 2017.
The increase in the net loss was a result of a dramatic decrease in transmission revenue from GH¢715.2million in 2017 to GH¢490.2million in 2018, owing to an almost 50% decrease in Transmission Service Charge, which became effective 15 March 2018.
“As a result of the reduction in revenue, and the loss recorded, improvements to the transmission infrastructure were significantly scaled down. It is therefore imperative that there be an appropriate injection of capital in order to maintain high operational standards,” Board Chairman of GRIDCo, Amb. Kabral Blay-Amihere, said in his report.
Ghana Grid Company Limited is wholly owned by the government of Ghana. The company is related to Volta River Authority, Electricity Company of Ghana, Northern Electricity Distribution Company Limited and Volta Aluminium Company Limited through common shareholding.