I’ve closed all of ECG’s accounts except one at GCB – Energy Minister

Energy Minister John Jinapor is taking steps to improve finances at the Electricity Company of Ghana (ECG). He has closed all of ECG’s bank accounts except one. This remaining account is now with GCB Bank.

“I insisted that it should be transferred to a state bank,” he said. This statement was made during an interview on Citi FM. It indicates a possible change in how public utilities are managed.

This decision follows concerns about ECG’s financial mismanagement. There have been issues with fund distribution and adherence to the cash waterfall mechanism. This framework ensures fair revenue distribution among sector players, including Independent Power Producers (IPPs).

“You heard the IPPs complain,” Jinapor noted. “You heard PURC complain that ECG was not adhering to the cash waterfall mechanism.”

The Minister revealed that ECG relied on costly overdrafts for payments to IPPs. He criticized this practice for creating unnecessary interest costs each month.

“What ECG used to do was take overdrafts and pay the IPPs weekly,” he explained. “By the end of the month, these overdrafts accrue a lot of interest.”

To fix this issue, Jinapor announced that monthly disbursements will be managed by a cash waterfall committee. This committee will meet on the 27th of every month.

Centralizing funds in one account at a state-owned bank aims to streamline processes and improve monitoring.