By Nelson Manneh
The Ministry of Finance and Economic Affairs on Friday signed a Memorandum of understanding with NAWEC that will facilitate the reduction of the debt burden on the National Utilities Company.
This MoU will provide financial assistance to assist NAWEC, a Company that has face series of challenges in the efficiency of its service delivery to customers, in recent times.
Speaking at the signing ceremony held at State House, Mr Amadou Sanneh, the Minister of Finance and Economic Affairs said this was an important milestone in their efforts to bring NAWEC to financial viability; that NAWEC carries a lot of debt in the Company’s revenue books which amounts to some Nine Billion Dalasi and that any loan facility drawn, will make the debt to go up even higher.
“What we have done is that we keep measures on some of these loans and some are already being serviced by the Central Government. These are still in the books of NAWEC as a liability. So this we are going to take out by capitalising on some of the loans that NAWEC has been carrying. For Government all these loans that were taken by the former Government is being serviced”, he said. “This MoU, will also strengthen NAWEC by injecting some capital into the Company’s balance sheet”, he said.
“For Water, D888,000,000 has been allocated whilst for Rural Electrification D1,200,000,000 is to be provided. For Social Security loans and generators, D816,000,000 has been allocated and Government is servicing NAWEC’s loans renegotiated with some Commercial Banks, amounting to D1,600,000,000 outstanding”, Mr. Sanneh said. He said this will help clean up NAWEC’s balance sheet and make it more lucrative for investment and that hopefully Government will get partners in the private sector to invest in the energy sector.
He said, ‘‘So without going too much, these are the basis of the signing ceremony. This is what we are going to sign between the Ministry of Finance and NAWEC and it will be witnessed by the Ministry of Energy”.
The Director of NAWEC Mr. Baba Fatajo, said they are grateful for the decision taken by the Ministries of Finance and of Petroleum and Energy, to help address this difficult financial situation that the National Utility Company has faced for years.
“We are confident that the measures outlined in the Memorandum of Understanding (MOU) to be signed today [Friday], including our commitment to control cost and reduce losses, will be able to strengthen our Company and the services we bring to the people”, Mr. Fatajo said.
He said the debt reduction measures are an essential part of the energy roadmap that was launched last year and that it outlines a comprehensive set of activities that will transform the energy sector of the country.
“This road map includes among others, a twenty-megawatt solar project that is currently being worked on with the World Bank and the European Union. Preparations are already on the final stages”, he said.
“I would also like to say that this is a necessary intervention if we are to turn around the affairs of this Company for the better. Because if you look at our books today, it is not attractive for private sector intervention. So we want to seize this opportunity to thank Government for their commitment to open a new page for NAWEC”, he concluded.