The Electricity Company of Ghana (ECG) has strongly rejected allegations that it has once again failed to meet its payment obligations under the Cash Waterfall Mechanism (CWM).
Some industry players had raised concerns about payment shortfalls, particularly for May, June, July, and August, with some Independent Power Producers (IPPs) confirming they had not received payments for these periods.
But the ECG in a rebuttal maintains that the reports circulating in certain sections of the media do not capture the full scope of its compliance efforts or the operational challenges it faces.
The ECG in its response raised five key points to make its case. First, it cites the failure of stakeholders to confirm actual payments. It explains that the inability of IPPs to validate the amounts received does not inherently imply that ECG has breached the cash waterfall mechanism.
ECG further went on to say that, contrary to assertions it has fully complied with payments to Tier 2 beneficiaries, including the PURC during the reviewed period.
The third point the ECG makes is that payments for July and August 2024 have been initiated to address the previous balances.
The fourth explanation the ECG provides is the impact of forex losses on Cash Waterfall mechanism compliance. More specifically, it says, that the discrepancy between the PURC exchange rate and the rates from the Ghanaian market has resulted in substantial losses, complicating ECG’s payment obligations to IPPs and WAPCo.
The final point is the cost of fuel purchases, ECG says, the costs associated with procuring fuel necessary for a stable power supply are not reflected within the CWM framework.
During the period under review, ECG incurred GHS 466 million in liquid fuel purchases due to unplanned supply challenges.
Based on these, the ECG says although the reports may have some valid concerns, it is imperative for stakeholders and the public to consider these factors before drawing conclusions about ECG’s financial integrity and its commitment to the Cash Waterfall Mechanism.
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