The Securities and Exchange Commission (SEC) has resumed talks with the Volta River Authority (VRA) about using the capital market to raise funds for its on-going and future projects.

A 10 percent year-on-year growth in electricity demand requires a sustained annual investment of about US$200million to bring an additional 200megawatts of power annually, but the Authority is unable to keep up with that investment from its under-par tariff.

"We have resumed discussions with the VRA about coming to the capital market to raise funds for its projects," Mr. Adu Anane Antwi, Director-General of the Securities and Exchange Commission, told the B&FT.

The genteel talks represent a new attempt by the SEC to convince VRA to turn to the capital market for raising funds following the change in hierarchy at VRA at the turn of the year.

The VRA last year adopted the International Financial Reporting Standard (IFRS) as part of measures to streamline its operations to eventually issue US$500million of corporate bonds on the international capital market and raise funds for infrastructure projects.

The electricity producer had hoped to raise the amount to finance four new projects that would generate about 700megawatts of electricity within three to four years. However, a change in hierarchy set the process few notches back.

Current power generation at peak is about 1,770MW while demand is about 1,850MW -- leaving a deficit of about 80MW.

Per the Public Utilities and Regulatory Commission (PURC) Automatic Tariff Adjustment formula, the Authority charges a tariff of about 14 pesewas per kilowatt hour for power it sells to ECG and Northern Electricity Department of the VRA.

However, the weighted average tariff per kilowatt hour for the Authority is about 20 pesewas per kilowatt hour. This is attributable to the fact that the Authority sells power directly to some major mining companies for a slightly higher tariff per kilowatt hour.

Out of the country’s total installed capacity of 2,846.5MW, the VRA generates about 75 percent of it from hydro and thermal sources. The mix includes: VRA hydro, 47 percent; VRA thermal, 36 percent; VRA solar generation, 0.1 percent; IPP thermal generation, 12 percent; and Bui hydro, five percent.

The SEC in recent years has been luring public companies, especially the utility companies -- VRA, ECG, Ghana Water Company -- to list on the local bourse or issue bonds to fund on-going projects.

The Ghana Airports Company Limited (GACL), which announced a net profit of GH¢19.1million for the 2013 financial year, is one of such entities that has expressed its willingness to list on the local bourse in the future.