The Bui Power Authority transacts power business with the Electricity Company of Ghana (ECG) Limited in the United States of America Dollars, instead of the local currency, Cedi.
The Public Accounts Committee (PAC) of Parliament expressed concerns over the issue during its public hearing in Accra yesterday.
The Chairman of the PAC, James Klutse Avedzi, posed the question to the Chief Executive Officer of Bui Power Authority at the time they were discussing debts the ECG owed the Authority – “Now, Bui Power CEO, why are you charging ECG in dollars?”
In a response, the Director of Finance for Bui Power Authority, Jemima Fayah, said they charge in dollars because the loan they contracted from China Exim Bank was dollar-denominated.
She added that, per the public-private agreement, the ECG is supposed to pay Bui Power in cedis equivalent.
“We went for a loan from China Exim Bank denominated in dollars to build the dam, so we needed to get the price that could take care of the loan we went for,” she said.
The Chairman of PAC, James Avedzi, was concerned because the ECG does not charge its consumers in dollars but in Ghana cedis.
He said, “So, if ECG wants to charge in dollars, because you are selling to ECG in dollars, they want to charge the consumers in dollars; can we change the cedi to dollar, so Ghana uses the dollar instead of the cedi?
“So, what it means is that you are pushing the burden of cedi depreciation to ECG, and for ECG to be able to also capture that, it is pushing it to the consumers,” Avedzi remarked.
The Director of Finance raised the argument that the Authority was also incurring losses because the dollar rate they used to sign the deal with ECG was not the same as what they charged to offset the China Exim Bank’s loan.
This argument fell flat, as the PAC Chairman probed further from her and it was established that according to the agreement, ECG is supposed to pay Bui Power with the current Bank of Ghana exchange rate, whenever payment was due.
“Your sales are charged in dollars already. Whatever you charge the ECG, assuming you charge them today and the exchange rate is GH₡12 to USD $1, and it takes one year for them to pay, will they use the ruling rate or will they use the rate at the time you sold the power to them?” a question to which Bui Power responded that the ECG will use the current BoG rate.
“So, you [Bui Power] are not suffering. The ECG is suffering any loses,” James Klutse Avedzi added.
DEBT
The Committee was, however, informed that the ECG has been owing Bui Dam since 2013, representing about 98% of its total debt.
However, the Director of Finance said it was now getting payment through the water cash fall, which is just 20% of what the Authority bills.
According to the CEO of Bui Power Authority, Samuel Kofi Ahiave Dzamesi, the current debt ECG, which takes about 99% of its power, owed the Authority was US$729 million.
Earlier, as of 2021, when the audit was conducted, the total debt was US$509 million, but had increased to US$701 million in 2023.
When asked how they were able to get money to operate, the CEO said “It is in the hands of God,” a statement that set the auditorium into a brief laughter.
Meanwhile, he told the Committee that there was a meeting recently where the ECG promised to pay the debt.
