The Public Utilities Regulatory Commission (PURC) has swiftly debunked media reports suggesting that the Electricity Company of Ghana (ECG) is on the brink of bankruptcy.
According to PURC, these claims are entirely misreported and inaccurate.
The Commission’s Executive Secretary, Dr. Ishmael Ackah, was wrongly attributed to have warned of ECG’s financial collapse.
PURC emphasized that it had not issued any warning regarding ECG’s bankruptcy.
Instead, it was ECG’s management that first raised concerns about its financial situation in a letter to the Presidency and the Minister of Energy.
The letter, dated August 26, 2024, expressed serious concerns about ECG’s revenue shortfall, which could lead to severe financial instability and potential bankruptcy if not addressed promptly.
Financial Crisis
ECG’s financial woes are not new. Despite efforts to improve cash collection through digital and metering programs, and significant tariff increases of over 75% since September 2022, the company’s financial instability persists.
In June and July 2024, ECG declared revenues of GHS 884.2 million and GHS 857 million, respectively, which were insufficient to cover the monthly $47 million Tier A plus WAPCo’s bill under the Cash Waterfall Mechanism.
PURC’s Recommendations
To address ECG’s financial challenges, PURC suggests that the Ministry of Energy, in collaboration with ECG and other stakeholders, engage in a comprehensive examination of the root causes of the company’s financial difficulties.
The Commission also recommends that ECG be transparent about its revenue collection, contracts, and commercial and technical losses.
Source:dailyguidenetwork.com