The Managing Director of the Electricity Company of Ghana (ECG) has clarified that the company has not defaulted on payments to Independent Power Producers (IPPs).

JoyNews has confirmed that the Electricity Company of Ghana (ECG) has once again defaulted on its fixed monthly energy purchase price with all Independent Power Producers (IPPs), raising concerns about a potential resurgence of power outages, commonly referred to as “dumsor.”

The revelation contradicts President Akufo-Addo’s earlier assertions in his State of the Nation Address, where he claimed success in addressing Ghana’s power challenges. He highlighted a significant reduction in energy sector debts, saving US$34 million monthly through renegotiated agreements with IPPs. However, recent developments indicate that these promises have not been fulfilled.

The situation has raised doubts about the sustainability of Ghana’s power supply and underscores the challenges faced by the government in addressing the country’s energy needs effectively.

According to a report released by the Public Utilities Regulatory Commission (PURC) on the Cash Waterfall Mechanism (CWM) Validation Report for January 2024 Payment, it has been revealed that the Electricity Company of Ghana (ECG) continues to default on its renegotiated debt obligations for January. This finding directly contradicts the claims made by the President.

The report highlighted discrepancies in the disbursement of net revenues reported by ECG, which did not align with the approved allocation percentages submitted for November 2023. Furthermore, it was noted that since August 2023, ECG has failed to adhere to the guidelines of the new CWM as directed by the President.

This non-compliance undermines the principle of fair and equitable revenue allocation to sector players under Level B, as approved by the CWM Standing Committee in accordance with the revised CWM guidelines. These revelations indicate ongoing challenges within the ECG and raise concerns about the effectiveness of the measures implemented to address Ghana’s energy sector issues.

Speaking on JoyFM’s TopStory on March 11, the Managing Director of ECG, Samuel Dubik Mahama, expressed his concerns regarding the validation report released by the PURC. He argued that the PURC should have consulted with ECG before publishing the report, as they would have been able to provide clarification on why it seemed that they had not complied with the President’s directives.

Mr. Mahama further explained that the delay in payment was due to the need to reconcile forex arrears accumulated over the previous year using the revenues generated in January. He attributed this delay to the unstable nature of the Ghana cedi. Additionally, he emphasized that under the International Monetary Fund deal, ECG is prohibited from accruing any form of arrears and forex losses, necessitating the balancing of these payments with the revenue generated in January.