The Volta River Authority (VRA) has raised concerns about the demands made by Independent Power Producers (IPPs) for an increase in their monthly payments under the Cash Waterfall Mechanism (CWM), from $45 million to $59 million.
According to the VRA, if the government approves this request, it would have significant financial repercussions not only for the VRA but also for GRIDCo and the Bui Power Authority.
The Public Utilities Regulatory Commission (PURC) has initiated a review of the Cash Waterfall Mechanism to address the challenges associated with payment allocations.
Speaking to the press, the National Treasurer of the VRA Senior Staff Association, Jerry Nelson Nettey, said that there will be a potential negative impact on public power entities if these issues are not resolved.
“The major challenge is the mismanagement of the Cash Water Mechanism within that sector. The money that is reserved for the IPPs in the category A or Tier 1 group, we’ve cited letters that are saying that this $45 million is going to be increased or should be increased to $59.5 million.
“That in today’s foreign exchange is around 960 million Ghana cedies – ECG does not collect in a month,” he said.
He explained that VRA is struggling to stay afloat, adding that one of the few sources of relief comes from NEDCo, which provides power from the Brong Ahafo area to the northern regions, helping with liquidity.
When asked about power exports, Mr Nettey acknowledged that the VRA does engage in some exports, though President Akufo-Addo had requested a reduction.
He also stated that some IPPs are interested in exporting power, but questioned their priorities.
“There is some conversation too in there where we know independent power producers who are also interested in the export market.
“But I always ask why did the IPPs come into being. Why did they come to Ghana? They came to Ghana to help the energy sector. So how come they want to stay in Ghana and sell to some other people outside the country,” he asked.
