DESPITE a $2.4 billion debt that has crippled the energy sector, President Nana Addo Dankwa Akufo-Addo has assured of reduce significantly some of the levies and taxes on electricity tariffs.

According to him, he is proposing a number of policy interventions, which includes improving on transparency in tariff setting, and introduce a new tariff policy that would reclassify consumer categories in order to protect lifeline and strategic industrial consumers.

He added that government would enforce the procurement law and insist on open and competitive bidding for power capacity procurement.

“This will not only reduce the cost of power projects and ensure value for money, but will also address the problem of unplanned procurement”.

Delivering the State of the Nation Address in parliament yesterday, the President said 800 million dollars of the $2.4billion debt is owed to local banks which threatens their stability and that of the whole financial sector.

He said the huge indebtedness of the energy sector constitutes the single major hurdle to Ghanaians enjoying reliable and affordable electricity supply.

President Nana Akufo-Addo acknowledged that although there have been some improvement in the power supply since November last year, the challenges facing Ghana’s power sector are far from over.

According to him, the key problem is cost, saying Ghana produces power from Akosombo at three US cents per kilowatt hour but the marginal price charged for businesses is an effective 42 cents which is ten times more than the average tariff in West Africa.

This, he said, makes it very difficult to start or run a business in Ghana and be competitive.

“The cost of energy destroys businesses large and small. It is the bane of the vulcaniser, the tailor, the dressmaker and the hairdresser, the carpenter and the wayside fitting mechanic.

“It destroys jobs. It compounds poverty. The current state of the energy situation in our country is unsatisfactory,” he said.

President Akufo-Addo revealed that as at the end of 2016, the Electricity Company of Ghana (ECG) had signed 43 Power Purchase Agreements (PPA), whilst a further 23 were under discussion.

He announced that government is conducting a review of all the Power Agreements entered into by the previous government in order to prioritise, renegotiate, defer or cancel outright, if necessary, in the national interest.

He disclosed that government has begun to develop a national electricity master plan, which would also explore the benefits of listing the Volta River Authority (VRA), and the Ghana Grid Company Limited (GRIDCo), on the Ghana Stock Exchange as part of measures to make them efficient enough to strengthen Ghana’s power sector.

The President said government would encourage increased private sector investment in utility scale solar and wind energy projects, as well as accelerate the development of mini-grid solutions in off-grid and island communities for lighting, irrigation and other economic activities.

“We will, consequently, review the Renewable Energy Act to provide further incentives to attract the private sector to invest.

“The Ghana Compact II programme has officially come into force. Both parties to the Compact, the Governments of Ghana and United States of America, are committed to complying with their obligations.

“However, the implementation of Ghana’s commitments has faced some challenges due to disagreements between stakeholders, particularly between labour, ECG and the Millennium Development Authority (MiDA).

“We need further dialogue on the key issues that have generated these disagreements. We are aware that these discussions should be concluded urgently in order to arrive at the decisions that will allow for its implementation.

“We expect that all stakeholders will discuss these issues dispassionately and transparently, to ensure that all concerns are adequately addressed” he added.