ECG’s non-Compliance with Cash Waterfall Mechanism raises concerns – PURC

The Electricity Company of Ghana (ECG) has been found in non-compliance with the revised Cash Waterfall Mechanism (CWM), as reported by the Public Utilities Regulatory Commission (PURC).

Updated in August 2023 under a directive from President Nana Addo Dankwa Akufo-Addo, the CWM was designed to enhance financial stability within Ghana’s energy sector.

The revised guidelines mandated that ECG make monthly payments to various stakeholders according to an approved model aimed at promoting transparency and financial fairness.

Despite these requirements, the PURC has expressed concerns regarding ECG’s adherence to the new system.

“Following the adoption of the revised CMW, ECG was expected to make monthly payments to the stakeholders based on the approved monthly model. However, since the inception of the revised CWM, ECG has not complied with the guidelines of the new CWM as directed by the president, thus, defeating the purpose of the fair and equitable revenue allocation to sector players,” part of the statement read.

The PURC also highlighted that this lack of transparency and consistency in revenue payments has worsened the financial sustainability of the sector and negatively impacted the quality of service delivery.

The commission attributed part of the sector’s ongoing financial difficulties to ECG’s failure to implement the mechanism as intended.

“The lack of transparency and consistency in the payment of collected revenues over the period has burdened the sector with continual deteriorating financial sustainability and worsening quality service delivery, however, the under-listed performance challenges have negatively affected the implementation.”