The Policy Lead for Petroleum and Conventional Energy at the Africa Centre for Energy Policy (ACEP), Kodzo Yaotse has commended Price WaterHouse Coopers (PwC) for its latest audit report, which has shed light on significant levels of mismanagement and questionable practices at the Electricity Company of Ghana (ECG).

This follows an audit by PricewaterhouseCoopers revealing that the ECG under-declared over 1 billion cedis in revenue to the cash waterfall mechanism, disrupting the equitable distribution of funds in the power sector.

The report also highlighted ECG’s violation of an IMF directive by operating more than 80 bank accounts instead of a single account, raising concerns about financial mismanagement and inefficiencies.

According to him, the report exposes key issues undermining the integrity of Ghana's power sector and offers critical insights into the challenges surrounding sector debt and revenue allocation.

In an interview on Joy FM's Top Story on Thursday, January 16, Mr Yaotse stated that the findings revealed that ECG has been unilaterally altering the agreed-upon cash waterfall mechanism—a system designed to regulate the equitable distribution of revenue among stakeholders.

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"This is the second audit that has been done by PwC on the power sector in terms of the payments. And I must say, it's been very valuable in exposing the higher level of mismanagement and the questionable difference at play at ECG which is undermining the integrity of the power sector," he said.

Mr Yaotse described as unsustainable the country paying approximately $1.5 billion annually to clear debts owed to IPPs and other entities.

"ECG has been under-declaring how much it collects to retain more funds for its operations. This practice deprives independent power producers (IPPs) and other stakeholders of their rightful share, resulting in mounting debts that the government has had to cover from the national budget," he added.

The cash waterfall mechanism, a framework agreed upon by all stakeholders in the sector, ensures that revenue collected is distributed equitably to power generators, distributors, and other players. ACEP criticised ECG for deviating from this mechanism, adding that the funds retained by the company have often been used for purposes that are questionable.

Read also: GH₵490m unaccounted for by ECG in three months – Audit report

"ECG cannot unilaterally decide to divert from a system that was designed to address revenue challenges in the sector. If they have legitimate concerns, those should be addressed through the proper channels rather than through unilateral actions," ACEP emphasised.

ACEP underscored the urgency of addressing the inefficiencies highlighted in the PwC report, warning that continued mismanagement would exacerbate the sector’s financial challenges.