Former Public Utilities and Regulatory Commission (PURC) board member Dr. Nii Darko Asante is pointing fingers at the Electricity Company of Ghana (ECG) for the collapse of the Cash Waterfall Mechanism (CWM). He claims ECG’s selfish revenue collection practices are to blame, prioritizing their own needs over other essential sector players like GridCo and generation companies.

The Issue with ECG’s Revenue Collection

Dr. Asante explains that ECG collects revenue from consumers but fails to distribute it fairly. For instance, if ECG is supposed to collect 100 cedis and their costs are 20 cedis, but they only collect 40, they still keep the full 20 cedis. This leaves other sector players with only 20 cedis instead of the 80 they should get.

Cash Waterfall Mechanism’s Purpose

The CWM aimed to correct these imbalances by ensuring fair distribution according to predefined ratios. It brought visibility to how insufficient funds were shared. However, ECG’s consistent failure to collect sufficient revenue and excluding significant revenue portions from the CWM undermines the sector’s financial recovery.

Expert Concerns

Dr. Steve Manteaw, Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI), shares concerns about ECG excluding 50% of its revenue from the CWM. This creates credibility issues and hinders progress in addressing financial challenges.

Call for Urgent Reforms

Both experts urge reforms to ensure fair distribution and accountability across the energy sector. They acknowledge ECG’s complaints about insufficient funds but emphasize other sector players face similar challenges.

The way forward involves addressing ECG’s revenue collection practices and ensuring transparency and fairness in the CWM. Only then can Ghana’s energy sector achieve stability and growth.