The Volta River Authority (VRA) has reported a significant improvement in net losses year-on-year from about GH¢1.2billion to GH¢100million at the end of 2019, representing a 91.6 per cent reduction.
The reduction is attributed to strategic actions such as the implementation of a Financial Recovery Plan rolled out in 2018, a cut in administrative expenses and an aggressive export drive among others, its Chief Executive Officer, Emmanuel Antwi-Darkwa, said in a statement to mark the power generation and distribution firm’s 59th anniversary.
“We have been able to significantly improve our finances since we instituted our financial recovery plan. With the support of all our stakeholders, in particular all staff, through our collective resolve to move VRA Beyond Aid our net financial position on a year-on-year basis, has improved from consistent losses of over GH¢1.2billion to a projected net loss position of less than GH¢100million at the end of 2019. This achievement is noteworthy,” he said.
He further attributed the success to attractive pricing regimes offered to customers in the highly competitive regional market, as well as the coming on-board of new local customers through pricing incentives; and most significant of all, the refinancing of expensive short- and medium-term loans, among others.
Mr. Antwi-Darkwa said: “We still continue to export significant amounts of power to the sub-region, which assures us a decent cash flow. Further, we have driven down our costs, which ensures our competitiveness.
“Our thermal operations have significantly improved, even though there is still room for more improvement; and we are also reducing our carbon footprint through further expansion of our renewable portfolio. More importantly our finances have improved, which assures us of long-term sustainability.”
Last year’s improvement is not in isolation. Since government’s payment of US$738million to the Authority through the ESLA bond issue last year, and the shift to natural gas usage a few years ago, the company has drastically driven down its debt levels and has now been placed on the path of sustained growth.
“For instance, from a severely impaired financial position in 2016, the three-year financial recovery plan narrowed its net losses by 49 percent from GH¢430.5million in the previous year to GH¢220million in 2018.
This figure is a further decline from the GH¢1.3billion debt that was inherited by current leadership of the state power producer back in 2016, representing a combined 83 percent reduction in the company’s net losses between 2016 and 2018.
Impact of COVID-19
While Mr. Antwi-Darkwa pointed to significant progress in the past 59 years, particularly in the last three years, he said the recent events of COVID-19 “require that we re-write the script for running our business”. As a result, he said, “most of the assumptions underlying VRA’s business plans will have to be reviewed to reflect the changing social and economic environment in which our sector operates”.
Additionally, the pandemic, according to him, has created opportunities that introduce new paradigms for the electricity sector – including the need for building further robustness into planning to ensure that business continuity is assured in spite of threats from health-related workforce disruptions, cyber breaches or supply chain challenges.
“For these reasons, we will review our business plans and update our BRAISE strategy with initiatives which guarantee that we achieve sustainability, resilience and growth, irrespective of dynamics in the energy sector and predictable external disruptions,” he added.
Going forward, Mr. Antwi-Darkwa described the future of the Authority as bright in spite of the current impact of COVID-19 on the economy, saying “we need to proceed with a sense of urgency if we are to succeed and continue to strengthen our market leadership”.
Other portfolios and projects update
According to the CEO, a rooftop solar project – which is to serve as precursor to establishing solar parks and rooftop solar facilities in the Akosombo and Akuse Enclaves before end of the year – has been completed at VRA’s head office.
Additionally, he mentioned the completion of a number of projects, notably upgrading the Tema Natural Gas Regulating & Metering Station; the Volta Place; the state of art Akosombo Eye Clinic; the Dodi Princess II and its Passenger Lounge; renovation of both the Akosombo and Aboadze JHS Complexes; the Aboadze Clinic and water supply among others.
“We will continue working on our outstanding projects like the ESD building in Akuse, the new Procurement Department Office Building, and other key projects to support our business. We have also begun the process of converting the Akosombo Township into a smart city. We will commence with a feasibility study and proceed with the implementation afterward,” he said.
Others include the commencement of a 17MW Solar PV project in Lawra/Kaleo, Upper West Region, while work has also commenced on the 60 MW Pwalugu Multipurpose Project. This project with its 50MW solar component is the first of its type (hybrid) in the country, and is also expected to make a significant impact on the socio-economic development of our Northern Regions. Work on the project is planned to be accelerated after the COVID-19 events subside.
On the subsidiaries front, Mr. Antwi highlighted the successful transition of PROPCo – a property holding company, and the VRA Health Services into fully-fledged subsidiaries, while efforts are being made to procure strategic partners to expand the operations of Akosombo Hotel Limited, Kpong Farms Limited and the Volta Lake Transport Company.
“We are the nation’s first and leading renewable energy utility, and will continue to expand our portfolio to reinforce our leadership in the provision of clean energy. We will also restructure the Authority into a multi-business holding company,” he reiterated.