JoyNews has confirmed that 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.
But speaking on JoyFM’s TopStory on March 11, the 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, 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, 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.
They came to the table, we calculated but let’s note one thing, so you think ECG will default on the IPPs and IPPs will keep quiet? It is quite hurtful when you are doing your best yet it is being seen that you are not actually compiling with stuff.
“When you say ECG has not complied with the President directive in a validation report what are you trying to achieve because if you had sat with everybody within the chain they would have told you what transpired,”he said.
He argued that before the IMF deal, there was a 60-day invoice gap. But currently, with the renegotiation they are expected to make this payment monthly.
Mahama added that as of now, he has finished the Forex reconciliation and has therefore been able to pay IPPs in January.
Responding to concerns that dumsor has returned the Managing Director stressed that it has not.
