ECG MD, Julius Kpekpena
A new audit by PricewaterhouseCoopers (PwC) has revealed that the Electricity Company of Ghana (ECG) paid GH¢402.59 million in commissions to a third-party payment vendor before settling debts owed to key power producers.
The payments were made outside the standard Cash Waterfall Mechanism (CWM), raising concerns about ECG’s financial management and the ongoing liquidity crisis in Ghana’s energy sector.
The audit, covering ECG’s financials from January to December 2024, found that vendor commissions rivaled payments made to the Volta River Authority (GH¢ 411.67 million) and exceeded those to Bui Power Authority (GH¢ 322.79 million).
It also flagged a broader pattern of financial irregularities, including ECG’s under-declaration of GHS 5.33 billion in total revenues for 2024. With steadily increasing commission payments throughout the year, the report emphasizes the need for ECG to reassess its financial practices and engage relevant stakeholders to ensure transparency.
As Ghana’s energy sector faces mounting financial risks, the new John Mahama-led administration and regulators are under pressure to address these long-standing revenue management challenges.
An audit report carried out by PricewaterhouseCoopers (PwC) on the accounts of the Electricity Company of Ghana (ECG) for the 2024 financial year uncovered that GH¢5.3 billion was under declared.
GH¢5.3bn Revenue Under Declaration
PwC’s audit also found that there was a total of GH¢5,331,228,363 revenue discrepancy between the Cash Waterfall Mechanism (CWM) and the ECG’s Cash Settlement Platform Report.
According to the PwC report, ECG significantly under-reported its revenue to the regulator, further compounding the financial instability of the power sector.
The audit found that while ECG’s accounts showed revenue collections of GH¢15.8 billion in 2024, it only declared GH¢10.4 billion the Cash Waterfall Mechanism, effectively hiding GH¢5.3 billion from official records.
This revelation raises questions about ECG’s financial practices and the broader implications for Ghana’s already fragile energy sector, which has long struggled with liquidity challenges, unpaid debts to the Independent Power Producers, and inefficiencies in revenue collection.
Even though ECG under-declared its revenue, it failed to properly disburse payments to key players in the power value chain, the PwC report revealed.
Out of the GH¢10.4 billion it officially declared, ECG paid only GH¢6.5 billion, leaving a GH¢3.9 billion shortfall that remains unaccounted for.
There were discrepancies between the amounts recorded as tariff revenue collections in the CWM (GH¢10.44 billion) for the task 2 period of January to December 2024 and the amounts validated as collections per the bank statements provided (GH¢15.53 billion)
A net amount of GH¢5.09 billion represents the total amount under-declared for the period when the CWM is compared to the amounts validated per the bank statements.
A Business Desk Report