Finance Minister Mohammed Amin Adam has revealed that the government has begun auditing the Cash Waterfall Mechanism through which revenue collected from the electricity market by the Electricity Company of Ghana (ECG) is shared across the value chain.

According to Dr Adam, addressing the challenges facing the cash waterfall mechanism will bring accountability and transparency to revenue collections and ensure it is being used for its purpose.

Speaking to the media at a press conference on the sidelines of the IMF and World Bank Spring Meetings in Washington DC, he said “To bring accountability and transparency to bear on the cash waterfall mechanism, we have started auditing and we are also required to publish the findings from the audit. We have already done one audit and we have published the findings.”

“We are going to continue to do that so that we can bring transparency and accountability so that all revenues meant for the cash waterfall goes to the cash waterfall for the purpose for which it was created,” Dr Amin added.

Additionally, a single revenue collection account has been established for ECG’s revenue collection process, he noted.

“Therefore, ECG will not collect revenue through the many accounts that they operate. Everything will come through a single collection account, so it is easier for all of us to track,” Dr Amin said.

This follows a mounting debt owed to Independent Power Producers (IPP) and the energy sector's financial challenges.

Early this month, the Public Utility Regulatory Commission (PURC) ordered the Electricity Company of Ghana (ECG) to pay GHȼ446,283,706.29 before or by April 30, 2024, to ‘Category B’ beneficiaries under the cash waterfall mechanism.

The Category B beneficiaries include the Volta River Authority (VRA), Bui Power Authority, BXC Solar, Meinergy, Safisana, Early Power, GNGC (Ghana Gas), and the Ghana Grid Company (GRIDCo), as well as some regulatory levies.

The amount represents actual revenue collected and declared by ECG and approved by the cash waterfall mechanism standing committee for payment from August 2023 to February 2024, which remained unpaid.

In a regulatory order to ECG on Monday, April 15, the Commission stated that “In the event of failure to pay by the said date [before or by April 30], the Board Members and Management of ECG shall be held liable.”

PURC also imposed a regulatory charge of 3,000 penalty units (GH₵36,000) on ECG for failure to submit details of all bank accounts to the Commission by a stated date.