The Volta River Authority (VRA) has called for a review of the cash waterfall mechanism (CWM) to enable state-owned power companies to access their full share of electricity revenue to strengthen their operations.
The VRA maintained that although the revenue-distribution mechanism, introduced more than six years ago, had significantly improved its cash flow and liquidity, the authority currently received between 60 per cent and 75 per cent of its bills in some instances, while independent power producers (IPPs) received 100 per cent of what was due them.
The VRA has petitioned the Public Utilities Regulatory Commission (PURC) and other relevant authorities to ensure that state-owned power agencies receive their full share of sector revenues to strengthen their capacity to invest in power generation.
The authority explained that the revenue shortfall situation often affected its ability to efficiently undertake planned projects and improve its services to the country.
“The introduction of the CWM has really improved the cash flow and liquidity of the authority, but still the VRA is not receiving 100 per cent of its bills, and so we are unable to do all the things that we would like to do to serve the country better,” the Board Chairman of VRA, Jabesh Amissah-Arthur, told journalists in Accra after the 16th stakeholders’ interface and annual general meeting (AGM) of VRA last Thursday.
The event was attended by the Director-General of the State Interests and Governance Authority (SIGA), Professor Michael Kpessa-Whyte; the Director in charge of Power at the Ministry of Energy and Green Transition, Sulemana Abubakari; the Chief Executive of VRA, Edward Ekow Obeng-Kenzo; the Executive Secretary of PURC, Dr Shafic Suleman, and other dignitaries.
Pushing 100 per cent cash waterfall payments to VRA dominated discussions at the 16th stakeholders’ interface and AGM.
Background
The CWM is a revenue-distribution framework introduced to ensure that funds collected from electricity consumers are transparently and equitably distributed among players across the power value chain, including power generators, fuel suppliers, transmission and distribution companies.
The mechanism was approved by Cabinet in July 2017 and became operational in April 2020 under the Energy Sector Recovery Programme (ESRP), as part of efforts to address persistent cash-flow challenges and accumulated debts in the electricity sector.
A revised CWM was subsequently adopted and implemented in August 2023, with further updates approved in 2025 to improve the distribution of sector revenues and strengthen the financial sustainability of the electricity value chain.
Mr Amissah-Arthur stated that the authority’s improved financial performance in 2025 did not eliminate the need for a more efficient revenue-distribution system to support its long-term investment plans.
He said the VRA returned to profitability in 2025, recording a net profit of GH¢88.04 million, compared with a net loss of GH¢105.75 million in 2024, largely on the back of the appreciation of the Ghana cedi and prudent financial management.
The former Chief Executive of Bui Power Authority stressed that the timely and full payment of revenues due to the authority remained critical to enable it to finance capacity expansion and renewable energy projects.
The VRA Board Chairman added that the authority was pursuing projects, including a 2,000 megawatts (MW) Renewable Energy Master Plan, to increase its generation capacity and support the country’s growing electricity demand.
Ministry’s position
Mr Abubakari, who represented the sector minister, stated that the government recognised the financial challenges confronting the VRA and was taking steps to improve the financial sustainability of the power sector.
He said the government had reformed the mechanism to ensure that generators were paid for the power they produced, while also renegotiating agreements with independent power producers and committing $1.47 billion to clear legacy debts in the energy sector.
He added that the ministry was aware of the VRA’s outstanding trade receivables and would continue to work to ensure that the authority was paid fully and on time for the electricity it supplied.
