The Electricity Company of Ghana (ECG) incurred expenses to the tune of GH¢182.5 million (GH¢182,576,235.15) as capacity charge paid to one Independent Power Producer (IPP), Cenit Energy, for 2018.
Cenit supplied power for only 2 months
What is even more interesting is that Cenit supplied power for only two months in the whole year.
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Cenit did not supply power for 10 months
For 10 months of the year, Cenit Energy did not supply any power to ECG but received monthly payments ranging from over GH₵13 million to over GH₵16 million for all the 10 months.
300 kWh in August and 2.2 million kWh in December
Cenit supplied only 300 kilowatts hour (kWh) in August and over 2.2 million (2,220,900) kWh in December for the full year.
Paltry 2.2 million kWh supplied for the whole of 2018
This brings the total kilowatts hour of power supplied by Cenit Energy in the whole of 2018 to a paltry 2.2 million kilowatts hour (2,221,200 kWh).
Payments for 2 months power supply
For the two months that Cenit Energy supplied power, it received GH₵15.6 million (GH₵15,684,974.74) for supplying 300 kWh in August and GH₵17 million (GH₵17,088,379.02) in December for supplying 2.2 million (2,220,900) kWh.
Monthly payments though power was not supplied
The months that Cenit Energy did not supply any power but was paid include January – GH₵16.3 million (GH₵16,362,105.88), February – GH₵13.2 million (GH₵13,237,673.18), March – GH₵14.6 million (GH₵14,610,248.16), April – GH₵14.1 million (GH₵14,148,574.05), and May – GH₵14.6 million (GH₵14,676,216.88).
The rest are June – GH₵14.5 million (GH₵14,528,410.16), July – GH₵15.5 million (GH₵15,574,916.37), September – GH₵15.3 million (GH₵15,348,073.37), October – GH₵15.8 million (GH₵15,884,538.40), and November – GH₵15.4 million (GH₵15,432,124.94).
These are contained in the report of the auditor-general on the Public Accounts of Ghana: Public Boards, Corporations and Other Statutory Institutions for the period ended December 31, 2020.
The report, dated May 31, 2021, was signed by Johnson Akuamoah Asiedu, acting auditor-general.
The audit team said it could not ascertain whether there was value for money for the expenses incurred.
The auditor-general observed that management did not critically analyse the contract and its implications to ensure value for money is achieved before signing the contract, which contributed to the financial challenges.
According to the report, ECG purchased a total power of 10,900.55 gigawatt hours (GWh) from power producing companies and sold 8,251.47 GWh to customers.
24.3% system losses
As a result, ECG lost 2,649.08 GWh, which represents 24.3% of power purchased from the power producing companies, to system losses.
The management of ECG responded that per the Power Purchase Agreement signed between ECG and Cenit Energy and some Independent Power Producers (IPPs), ECG is required to take energy on declaration by the IPPs to be available and pay the cost of the energy plus capacity.
If ECG decides not to take power from any IPP, then ECG incurs a capacity charge.
According to ECG, the payment of the capacity charges to Cenit Energy is in line with the Power Purchase Agreement (PPA).
Per the report, ECG did not establish an audit committee, and as a result, the Board Sub-committee on Finance performs oversight responsibilities of Audit Committee function.
The auditor-general said it could not sight minutes of meetings of the Board Sub-committee on Finance for review to ascertain whether the committee is functioning effectively
It noted that the internal and external audit recommendations may not be implemented in the absence of the Audit Committee.
Source: Elvis DARKO || The Finder, Accra
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