VRA faces GH¢106m loss due to forex turmoil and rising demand

Financial Challenges and Operational Struggles

The Volta River Authority (VRA) has experienced a significant shift in its financial performance, recording a loss of GH₵106 million for the 2024 financial year. This marks a sharp contrast from the GH₵80 million profit reported in 2023. The authority attributes this downturn primarily to severe foreign exchange losses and the reallocation of power that was originally intended for export to meet local demand.

At the 15th Stakeholder Interface Meeting in Accra, Board Chairman-VRA Jabesh Amissah-Arthur described 2024 as a particularly challenging financial year. He highlighted that exchange rate volatility led to a massive forex loss of GH₵695 million, up from GH₵591 million in 2023. This loss significantly impacted the authority’s performance.

This challenge was further exacerbated by the inability of Independent Power Producers (IPPs) to meet local demand at certain times. As a result, the Public Utilities Regulatory Commission (PURC) directed that export-bound power be redirected into the national grid at a lower tariff than export rates. While this decision was necessary, it caused a 38 percent increase in financial expenses, further straining VRA’s balance sheet.

“A critical challenge was the diversion of power originally slated for export to the West African Power Market to serve the local grid. While total revenue increased by 17 percent to GH₵9,291 million, the lower domestic tariffs and higher financial costs eroded those gains,” Mr. Amissah-Arthur explained. He urged the PURC to adopt a different tariff mechanism for power diverted from export to local use, to cushion the authority from future financial shocks.

Operational Shifts and Rising Costs

VRA Chief Executive Ekow Obeng-Kenzo noted that operations in 2024 were dominated by more expensive thermal generation, which rose from 79 percent to 89 percent of capacity. He added that hydro-generation prospects remain constrained, with only a 6.2 percent rise in reservoir water levels during the year under review. This indicates declining storage that will likely increase reliance on costly thermal power going forward.

Mr. Obeng-Kenzo also outlined ongoing challenges affecting key generation expansion projects such as the 16.5 MW Pwalugu Solar Project, the 30 MWp Akuse Floating Solar Plant, and the Anwomaso Phase Two Thermal Project. According to him, persistent funding shortfalls, forex losses, mounting inter-utility debt, and regulatory changes continue to hamper progress. He emphasized the need for endurance, innovation, and efficiency to sustain VRA’s leadership in Ghana’s power sector over the next five years.

Governance and Future Outlook

Director-General of State Interests and Governance Authority (SIGA), Prof. Michael Kpessa-Whyte, commended VRA for its corporate social responsibility initiatives but called for stronger governance and oversight to restore profitability. He revealed that new guidelines governing dividend payments from state-owned enterprises (SoEs) are being finalised, urging VRA to deepen its contribution to national development through safe, reliable, and environmentally sustainable energy production.

Representing the Minister of Energy and Green Transition, Deputy Minister Richard Gyan-Mensah lauded VRA for increasing its generation capacity by 23 percent and advancing Ghana’s green energy agenda. He assured stakeholders that the cash waterfall mechanism will be implemented fairly to enhance VRA’s revenue mobilisation and avert future losses.

Mr. Gyan-Mensah also underscored the importance of completing stalled projects, insisting that “every idle plant must be brought back online” to ensure stable and efficient power supply nationwide.