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BusinessCash Waterfall Mechanism was made to favors IPPs - VRA Senior Staff

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Cash Waterfall Mechanism was made to favors IPPs – VRA Senior Staff

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Senior Staff Association (SSA) of the Volta River Authority (VRA) expresses concern over the impact of the revised Cash Waterfall Mechanism on the company’s operations.

Implemented in April 2020 and revised in 2023 under the Energy Sector Recovery Programme (ESRP), the Cash Waterfall Mechanism aims to ensure fairness and transparency in distributing energy revenues among electricity distribution companies.

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However, the Senior Staff of VRA argues that the reality contradicts this intention, citing that Independent Power Producers (IPPs) receive a fixed amount of $43 million monthly.

Despite VRA generating 67.5 percent of power for the national grid, with IPPs contributing only 32.5 percent, revenue distribution disproportionately favors the IPPs, according to the association’s statement.

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“Currently, all available plants are running 24/7. That cannot be said about IPPs, yet at the end of the month, they are given $43 million which is more than half of all the payments made into the CWM by the ECG,” portions of the statement said.

“Will IPPs accept this kind of treatment meted to VRA?”the Association quizzed.

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The Association further dismissed calls for the privatisation of VRA.

“We wish to reiterate that VRA is the only strategic state-owned power utility providing and guaranteeing the energy security for the people of Ghana and for that matter none of its assets must be put on sale.

“The Authority is efficient in operating and managing its assets and thus should be allowed to operate its diverse generation mix, devoid of any unwarranted privatisation.”

Read full statement below:

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