The Volta River Authority (VRA), which generates and supplies power for Ghana's needs, has agreed to a new financing arrangement after banks refused to provide letters of credit (L/Cs).

But a Ghanaian think-tank has criticised the new arrangement under which the Public Utilities Regulatory Commission (PURC) will guarantee the outstanding debts owed to banks by the VRA and other utility providers.

L/Cs refused

Banks recently refused to provide the VRA with the L/Cs it needed to purchase crude oil for the Tema Thermal Plants.

Under the new arrangement, PURC will guarantee L/Cs opened for feedstock purchases for Ghana's thermal plants as well certain other VRA operations.

Double payment

But the Africa Centre for Energy Policy (ACEP) says the arrangement penalises consumers.

"We are going to pay all over again for the utilities we have already paid," according to head of operations at ACEP, Benjamin Boakye.

"All bills we pay are supposed to have a component that services these loans," adds Boakye, who asks where those funds have gone.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.