The Electricity Company of Ghana (ECG) has defaulted on its fixed monthly energy purchase price with all Independent Power Producers(IPPs).
This has sparked concerns about the possibility of a full-blown power crisis, also known as dumsor.
President Akufo-Addo in his State of the Nation Address touted his ability to solve Ghana’s power outages, adding that an amount of US$34 million is being saved on reconciled energy sector debts, a far better outcome than the “Take-Or Pay” his predecessor John Mahama left him.
“In the meantime, ECG has been able to secure a fixed monthly energy purchase price with all the IPPs. This has led to a monthly payment of US$43 million, instead of US$77 million, that is monthly savings of US$34 million or a forty-four percent (44%) reduction in monthly payments, a far better outcome than the “Take-Or Pay” system we inherited,” President Akufo-Addo said.
However, it has emerged that the President’s promise has not been kept.
A report released by the Public Utilities Regulatory Commission (PURC) on the Cash Waterfall Mechanism (CWM) Validation Report for January 2024 Payment revealed that the ECG is still defaulting on its renegotiated debt obligation for January contrary to the claims by the President.
The document revealed that disbursements of the net revenues reported by ECG were not by the approved allocation percentages submitted to ECG for November 2023.
Also, the PURC said since August 2023, ECG has not complied with the guidelines of the new CWM as directed by the President
They argued that this defeats the principle of fair and equitable revenue allocation to sector players under Level B as approved by the CWM Standing Committee in line with the revised CWM guidelines.
he Managing Director of ECG, Samuel Dubik Mahama, said PURC should have consulted his outfit before releasing the validation report.
He argued that they [ECG] would be able to better explain why it appeared as though they had not complied with the President’s directives.
Nevertheless, Mr Mahama said the delay in payment was because the revenues generated in January were used to reconcile the forex arrears accumulated over the previous year. This he attributes to the unstable nature of the Ghana cedi.
He explained that under the International Monetary Fund deal, ECG cannot accrue any form of arrears and forex losses hence it has to balance these payments with January’s revenue.
Meanwhile, Mr Mahama said ahead of this he wrote to every single IPP to send a team over to do the forex reconciliation as to what to pay them.
