Tracking down bad payers

The Malian Energy Company (EDM-SA), which ensures the country’s electricity supply, has been struggling for years under the weight of debt. Some public administration services owe the company a lot of money, and its management now seems determined to get paid. Although the energy crisis has lasted for almost a year, the restoration of these financial flows of more than 90 billion CFA francs could help to some extent improve current distribution and reduce load shedding.

Stop the bad payers! This move has surprised more than one person and continues to cause a lot of ink to be spilled. On June 11, 2024, the EDM cut off the electricity supply to some institutions of the Mali Drinking Water Management Company (SOMAGEP) due to large arrears of electricity bills.

“EDM’s collection services have been transferred to SOMAGEP. Some commercial units have been cut. However, general management and production units have not been affected. Abdoul Karim Koné, SOMAGEP communications officer, immediately confirmed to Studio Tamani that we are taking action to deal with the unpaid invoices. According to our information, the accumulated outstanding debt of SOMAGEP alone exceeds 33 billion CFA francs.

Is this EDM-SA sister company the first to plan to resume activities? We contacted the EDM-SA communications department, but it did not respond to our request. But everything indicates that the company’s management will not stop there, especially since the company’s list of bad payers is long.

Debt exceeds 90 billion

Ministerial departments and even the President of the Republic, public institutions of an executive nature, structures that report to the State budget and to regional or autonomous budgets. Almost the entire Malian public administration has invoices that have not been paid to EDM-SA for months or even years for electricity consumed or for work performed on its behalf.

According to an investigation conducted by colleagues from Le Soft weekly last March, the total amount of unpaid electricity bills for Mali’s public services as of February 7, 2024 is 90,213,726,071 CFA francs. The ministries of the Presidency of the Republic and the Prime Minister’s Office will have accumulated more than $21 billion in unpaid invoices, including more than $1 billion at the presidential level and more than $200 million at the Prime Minister’s Office.

In the Administrative Services Group, which brings together national directorates, decentralized state offices, teaching college directorates, military camps, etc., the only teaching college directorate on the left bank of the Bamako district presented a series of 3,471,360,470 CFA francs. The General Directorate of Higher Education and Scientific Research followed closely with 1,757,697,969 francs of unpaid invoices.

Some analysts say that although EDM-SA is in trouble due to the weight of its bank debt, if conditions allow, it could improve its cash flow and end or at least significantly reduce the months of forced power outages. All the money owed to him has been recovered. Therefore, a campaign to recover outstanding debts needs to be included in the action to solve the energy crisis.

Recurring Problems

The fact that the Malian government has not paid a large number of invoices to EDM-SA is not new. For many years, this problem has not been truly resolved. Not only do the agencies concerned not pay old invoices, but they also accumulate invoices day after day.

In 2017, Dramane Coulibaly, then Managing Director of EDM-SA, began a massive debt collection operation, which at the time was estimated at more than 40 billion CFA francs. Under his leadership, the public electricity distribution company has set a strategic direction that includes strengthening controls, combating fraud and deviance, right-sizing investments through strategic planning, reducing cash flow constraints and tax risks, and significantly improving collections. “EDM SA is a commercial company that provides electricity to customers, who in return must pay their bills to guarantee the smooth operation of the company. Our goal is not to humiliate anyone, but to maintain the status of EDM-SA. At Mali Energy, all customers are equal. It is for this reason that everyone must pay their bills to better contribute to the company’s operations, distribution and financial performance,” criticized the former general manager.

Some institutions of the Republic, such as the National Assembly and the ministries, as well as large local companies, bore the brunt of this restoration operation, being temporarily cut off by EDM-SA. At the time, only the President of the Republic, the Prime Minister’s Office, the Ministry of Foreign Affairs and the Malian Army Forces were in good standing with Mali Energy.

But this debt recovery policy would continue for a long time. After only two years at the helm of EDM-SA, Dramane Coulibaly would be dismissed as CEO in March 2018. According to certain indiscretions, its management would have allowed the company to recover large sums of money, but would have aroused the anger of some leaders of the then regime.

For some, the current transition period is an opportune moment for the authorities to recover the money owed by the public administration to EDM-SA, with the fight against corruption and mismanagement of public assets publicly listed as a priority for the authorities.

Various actions

Besides the alarming number of unpaid invoices, which seriously hampered the smooth functioning of EDM-SA, the energy crisis situation, which has not been effectively addressed for months, is attributed to several other factors, including energy demand and hydrocarbon supply difficulties.

With the commitment of the highest authorities of the transition period, some solutions have been initiated in the short and medium term. On March 7, 2024, the Ministry of Economy and Finance and the Association of Professional Banks and Financial Institutions of Mali (APBEF-Mali) signed a memorandum of understanding for the management of the debt of EDM-SA Bank, which includes the determination of the repayment period of the above debt (more than 300 billion CFA francs) within 10 years at an interest rate close to the marginal window of the BCEAO, and a one-year repayment moratorium.

“This restructuring of the bank’s debt will allow us to have more available cash,” said Amadou Djibril Diallo, managing director of EDM-SA, who also announced continued improvements in governance, reduction of fees and the flow of crisis management in the digitalization of basic collection services.

As part of efforts to achieve energy sovereignty in the coming years, the transitional president also recently launched the construction of at least three solar power plants in the country (200 MW on 314 hectares in Sanan Koroba, 100 MW on 228 hectares in Safo, and 100 MW on 120 hectares in Tikadougou-Dialakoro).

In addition, in order to strengthen the production fleet of Mali Energy, the Head of State handed over to the Ministry of Energy on June 6, 2024 a first batch of 15 generators, which will be supplemented by a second batch of 10 generator sets to ensure the production capacity of Mali Energy with a total capacity of 27.25 MW.