Ghana: VRA incurs GH1.4m losses to cedi depreciation
Ghana’s largest power generation company, Volta River Authority (VRA), has incurred GHS1, 407,235 million (US$175,904.38) in foreign exchange losses in three years due to the depreciation of the Ghanaian cedi.
The figure comprises GHS844, 352 losses on transactions with fuel suppliers and partners from 2019 to 2021 and GHS562, 883 on loan repayment over the same period.
This is contained in the 2022-2027 Multi-Year Tariff proposal submitted to the Public Utilities Regulatory Commission (PURC) for consideration.
The VRA has contractual agreements between its fuel suppliers and power plant partners, and it is required to honour its obligations, particularly payment for natural gas and operational spares in foreign currency while the receivables from the regulated market are paid in local currency (Ghana Cedis).
The average actual exchange rate for 2020 was pegged at GHS 5.596/USD while the PURC FX rate was GHS 5.3767/USD.
Unfortunately, Ghana’s trading currency witnessed consistent depreciation against the major currencies.
The exchange rate for the 1st Quarter of 2022 was GHS6.4892 to one USD.
Currently, a dollar is exchanged for GHS7.98.