The Bui Power Authority's decision to transact power business with the Electricity Company of Ghana (ECG) Limited in United States Dollars instead of the local currency, Cedi, has raised concerns among the members of the Public Accounts Committee (PAC) of Parliament. During a public hearing in Accra, the Chairman of the PAC, James Klutse Avedzi, questioned the Chief Executive Officer of Bui Power Authority about this practice, particularly in relation to the debts owed by ECG to the Authority.
It was revealed that Bui Power Authority charges in dollars due to a loan contracted from China Exim Bank, which was dollar-denominated. However, there is a public-private agreement in place stipulating that ECG is supposed to pay Bui Power in the equivalent amount in cedis. This has led to concerns about the potential impact on consumers, as ECG does not charge its consumers in dollars but in Ghana cedis.
The Director of Finance for Bui Power Authority explained that the decision to charge in dollars was influenced by the need to offset the dollar-denominated loan obtained from China Exim Bank for the construction of the dam. However, it was highlighted that this practice effectively shifts the burden of cedi depreciation to ECG and ultimately to the consumers.
Further scrutiny by the PAC Chairman revealed that according to the agreement, ECG is supposed to pay Bui Power using the current Bank of Ghana exchange rate when payment is due. This raised questions about the potential impact of exchange rate fluctuations on the financial positions of both parties.
It was also disclosed that ECG has been owing Bui Dam since 2013, representing a significant portion of its total debt. The Director of Finance mentioned that they were receiving only 20% of what the Authority bills through the water cash fall. The CEO of Bui Power Authority revealed that as of 2023, the current debt owed by ECG to the Authority stood at US$729 million, a substantial increase from US$509 million in 2021.
Despite the challenges posed by outstanding debts and currency exchange issues, the CEO expressed optimism about a recent commitment from ECG to address the debt. However, concerns remain about the financial implications for both parties and the potential impact on consumers.
In summary, the transaction of power business in dollars by Bui Power Authority with ECG has sparked important discussions about currency exchange, debt management, and consumer impact. The need for a sustainable and mutually beneficial approach to these issues is evident, and ongoing dialogue and collaboration between the involved parties will be crucial in addressing these challenges effectively.
-source thechronicle | curated by Neizer Gyamfi | Ghana Crimes
