The Auditor General (AG) has indicated that the Electricity Company of Ghana (ECG) is indebted to the Bui Power Authority (BPA) to the tune of US$386,878,949.46.
The AG, in its latest report noted that monthly invoices to the ECG have not been settled within the required 60-days period, resulting in a relatively huge outstanding debt as at December 2019.
Per Section 8 of the Power Purchase Agreement between the Ministry of Energy and the ECG for electrical supply from Bui Hydroelectric Plant, payment of energy produced by the seller and sold to the buyer as provided for in the monthly billed invoices shall be effected within 60 days of the dispatched of such invoices in US Dollars or its equivalent in cedis.
The report states that the repercussions of such continued delays or breaches of agreed payment terms could negatively impact the cash flows of the Authority. With almost two years down the line since the indication, the debt situation could further go up, with about four months to end the year, 2021.
The AG recommended that management of BPA ensure that previous and subsequent debt are collected on time in order to improve the liquidity position of the authority to enable it carry out its operations effectively.
The report also stated that the Ghana Grid Company (GRIDCo) is as well indebted to the BPA to the tune of more than US$41 million since 2013. Conversely, the BPA according to the AG, is allegedly indebted to the GRIDCo in the sum of GH¢5,658,577.58, but the authority, has, since 2013 not disclosed this indebtedness in its account.
According to the report, the matter is pending a ruling by the Public Utilities and Regulatory Commission (PURC). That said, the AG recommends that the management of Bui Power Authority should make stringent efforts to ensure early ruling on this matter by the PURC.
Meanwhile, the AG also confirmed that the BPA had failed to make and recognize a provision for the likely decommissioning of the Bui Dam in future.
The AG suggested to the authority to get a written representation from government on its commitment to fund future decommissioning of the dam, should the need arise.
Given the Authority’s financial report from 2015 to 2019, it shows an accumulated revenue of US$448,249 generated from the sales of electricity and cost of sale of electricity amounting to US$103,144. Profit before tax within the same period also amounted to US$178,052.