Ghana’s power sector has begun operating under a newly approved Cash Waterfall Mechanism (CWM), establishing a rule-based framework to distribute electricity revenues with greater transparency and equity across the industry.
The Public Utilities Regulatory Commission (PURC) confirmed the first validated disbursement under the scheme, following Cabinet approval on 20 May 2025.
The mechanism replaces previous discretionary allocation practices, which had been criticized for their lack of transparency and political influence.
Under the CWM, the Electricity Company of Ghana (ECG) is required to allocate collected revenues each month according to a prescribed formula.
The PURC is tasked with validating and publicly disclosing these disbursements to ensure accountability across the sector.
For May 2025, the PURC confirmed that ECG distributed USD 52.85 million (GHS 554.9 million) to Level A beneficiaries. These include Independent Power Producers (IPPs), gas transporters, and key fuel suppliers, all of whom are critical to sustaining the country’s electricity supply chain.
The inaugural payment represents a notable shift toward structured financial management within the energy sector.
The PURC verified that ECG adhered to the allocation sequence mandated by the mechanism, demonstrating the system’s operational viability.
Unlike past practices, the CWM requires ECG to provide full monthly reporting on receipts and payments, which the PURC then validates for public disclosure.
Analysts believe the new framework could significantly reduce recurring disputes between ECG and power producers over delayed or incomplete payments. The confirmed May disbursement establishes a functional baseline for the system’s performance.
However, stakeholders caution that the mechanism’s credibility will depend on consistent adherence, particularly during times of economic strain or political pressure. Many see its true test as maintaining discipline in revenue allocation even when fiscal challenges arise.
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