Deputy Finance Minister, Cassiel Ato Forson, has told Joy Business Government is yet to establish the source of funding for the electricity tariff subsidy.

Over the weekend, Government announced it would absorb about 25% of the recent adjustments in electricity tariffs. This translates into a a cost of GHC400 million to the state.

Government decided to subsidise the electricity tariffs after organised labour, led by the Trades Union Congress (TUC) threatened nationwide strike over recent utility tariff hikes by the Public Utilities Regulatory Commission (PURC).

"We can look at closing down some expenditure or maybe raising additional revenue to cater for that…or probably decide to borrow which I think is not an option", Mr Ato Forson stated.

Government has also admitted that its decision to absorb a fraction of the electricity tariffs hikes might affect some on-going infrastructure projects in the country.

However Mr Ato Forson noted because Government has already made the decision, it is important carry through with it. He added that Government will find a way by next week even though an actual source of funding is currently elusive..

He gave indications that details of how Government intends to fund the subsidy would be reflected in the budget statement which would be presented to Parliament next week.

Some industry watchers have, however criticized government's decision to subsidise the adjusted electricity tariffs.

They say the move could lead to a gradual collapse of the utility companies and discourage investment from independent power producers.

UK-based Economic Intelligence Unit for instance is warning that, the Volta River Authority's (VRA) decision to issue its first $500 million bond might face some challenges as a result of the electricity tariff subsidy.