The Electricity Company of Ghana (ECG) has informed the Public Utilities Regulatory Commission (PURC) that it is adhering to the Cash Waterfall Mechanism (CWM) directives to ensure the financial stability of the energy sector.
According to 3news.com, the ECG said this in a letter signed by its Managing Director, Samuel Dubik Mahama, in response to an 8-page statement issued by the PURC dated March 18, 2024.
Samuel Dubik Mahama addressed several implementation challenges, which included the treatment of Early Power as a Tier 1 beneficiary due to a Take or Pay Power Purchase Agreement, and the inclusion of WAPCo in Tier 1 Payments as directed by the Minister of Energy.
“Some challenges with the implementation of the CWM were tabled by ECG and accepted by the CWM Implementation Committee on 26th March 2024. Consequently, ECG is complying fully with the CWM-approved model going forward,” he said.
Additionally, ECG boss highlighted the importance of addressing the loan repayment terms with Bui Power Authority and Ghana National Gas Company Limited, which totalled GH¢250 million.
According to it, failure to integrate these repayments into the CWM could lead to financial difficulties for ECG.
“To recall, loans were contracted by Bui Power Authority and Ghana National Gas Company Limited to address the pressing financial challenges both companies were facing. By an agreement between ECG and the two institutions, these loans were novated to ECG for payment of both principal and interest as and when due. The total amount contracted by the two institutions is GHS250 million (Bui Power Authority GHS150 million and Ghana Gas Ghana Limited GHS100 million respectively).
“In executing the terms of the loan agreement, ECG has since been making payments as and when due, which fact can be verified by the beneficiaries. It is therefore prudent to address the issue of the repayment of the loan as part of the CWM payments to avoid placing ECG in a precarious financial position, failure to address these issues is very likely to result in the accumulation of debt since ECG has no other source of revenue generation to pay both the principal and the interest” he added.
Despite ECG’s efforts, PURC has threatened regulatory action due to ECG’s alleged non-compliance with the directive to publish a load-shedding timetable.
The PURC’s directive aims to ensure a fair distribution of tariff revenues across the electricity value chain.
However, ECG maintains that it has published notices for planned maintenance, which includes transformer injections but does not issue individual notices for each transformer injection.
ID/AE
Source: www.ghanaweb.com