Yapei Kusawgu lawmaker, John Jinapor, has said that the energy sector currently is in a state of paralysis.
He noted that the sector cannot meet the needs of the ordinary Ghanaian hence it has led to the inability of the sector players to procure fuel and to pay the Independent Power Producers (IPPs).
Mr Jinapor says he worries that former President John Dramani Mahama who is the flagbearer of the National Democratic Congress (NDC) for the 2024 elections, will inherit a very “dilapidated, anemic, and paralyzed energy sector.”
Mr Jinapor said these while revealing that an amount of 500 million cedis cannot be accounted for under the Cash Waterfall (CWF) Mechanism.
Ranking member on the Energy Committee of Parliament John Jinapor said this while dismissing claims by the Electricity Company of Ghana (ECG) that the current power outages being experienced are due to technical challenges.
It is recalled that the Managing Director (MD) of the ECG, Samuel Dubik Mahama earlier this month, while addressing concerns about the frequent power cuts, indicated that the ECG was facing some maintenance issues.
“We are having major maintenance issues. The issue we are having now has nothing to do with fuel. You are relying on a power plant that is to give you about 360 megawatts then around 4 pm the gas emergency safety valve has a problem. What do you do? It is a machine,” he said.
On Monday, March 11, 2024, the Company further explained that so far, 630 distribution transformers within communities across its operational areas have been identified to be full to capacity due to increased power demand.
That, it said, may result in blown fuses and broken conductors causing outages, especially during the peak load period (7pm – 11pm) in the affected areas.
“However, we wish to assure our customers that transformer upgrading, and new projects are on-going to relieve these transformers to ensure a more reliable power supply,” the post added.
“Customers within the underlisted communities/localities are therefore advised to report any localised outage or voltage fluctuations to the ECG Call Center on 0302-611611 (also available on WhatsApp) or reach us on our social media handles via ECGghOfficial (Facebook, Twitter, and Instagram) for prompt rectification,” it said on its X platform.
But addressing the press in Parliament on Tuesday, March 12, John Jinapor indicated that an amount fo 500 million Cedis cannot be accounted for under the Cash Waterfall Mechanism.
The Cash waterfall payment is a payment system that allows debtors pay higher-tiered creditors their full interest and principal first before lower-tiered creditors receive their own principal and interest payment.
Debtors usually structure this mechanism into tranches in order to prioritize and finance the loans with the highest debt obligations, principal and interest inclusive. The idea is that the most expensive debts should be serviced first.
In July, 2017, Cabinet approved the implementation of CWM as a new revenue distribution system to address the increasing legacy debts in the energy sector.
This mechanism is part of a wider strategy to ensure an equitable distribution of energy sector revenues to all stakeholders in the value chain as the ministry plans to put an end to the practice where some power producers are given priority over others in terms of financing.
Touching on the power outages in the country lately, John Jinapor, lawmaker for Yapei Kusawgu said “We have been monitoring the situation and just yesterday, we laid hands on the PURC’s cash water Fall Mechanism Validation Report for January 2024.
“I can confidently and sadly confirm to you that the load-shedding being experienced is not technical, it is financial, due to mismanagement, gross abuse of the cash waterfall mechanism and mismanagement of the funds.”
He explained “A total amount of 820 million Cedis was received. Indeed, the government is supposed to top up an amount of 200 million Cedis to add to the 800 million Cedis so that you will have about one billion Cedis for disbursement.
“Of this disbursement, what they call category A, the IPPs (Independent Power Producers) they are supposed to receive 500 million Cedis, and the other three hundred million is to be shared among the rest. When you read this report (CWF 2023 report), ECG collected 820 million Cedis and instead of paying 500 million to the power sector players, ECG decided to pay 120 million Cedis to the IPPs. That is one problem.
“Instead of paying the 300 million Cedis to GRDICo , VRA, and the other power sector players, they paid 162 million cedis , so what it means is that over 500million cedis cannot be accounted for, over 500 million Cedis has been used outside the Cash Waterfall Mechanism, we do not know where that money went to.
“The report said ‘it is to be noted that since August 2023 ECG has not complied with the guidelines of the new cash-for-water mechanism as directed by the President.’ So even the president’s directive is being violated. The other worrying thing is that since February the Ministry of Finance has failed to make the payment of 200 million cedis, which is culminating in more than a billion Cedis of fresh debts. If you add this to the 500 million Cedis that the ECG fails to pay on a monthly basis, that also takes you to close to about 2 billion Cedis, so clearly the sector is collapsing under this government.
“The energy sector of today is in a state of paralysis, the energy sector cannot meet the needs of the ordinary Ghanaian hence it has led to the inability of the sector players to procure fuel and to pay the IPPs . My worry is that a Mahama-led government will inherit a very dilapidated, anemic, and paralyzed energy sector.”