Expression of Interest - Details
- Eoi Name:
- Consulting Services For The Implementation Of The Cash Waterfall Mechanism (Recruitment Of Escrow Agent/ Escrow Bank)
- Pack #:
- MoE/CS/EOI/CWM/EA/01/2018
- Post Date:
- 17th January, 2018
- Submit Date:
- 24th January, 2018
- Tender Cat:
- Consultancy Services
- Agency:
- MINISTRY OF ENERGY
- Industry:
- Energy
- Description:
- Consulting Services For The Implementation Of The Cash Waterfall Mechanism (Recruitment Of Escrow Agent/ Escrow Bank)
The Ministry of Energy intends to apply part of its Internally Generated Funds (IGF) to fund eligible payments under the contract for recruitment of consultant. Consulting Services for the Implementation of the Cash Waterfall Mechanism (Recruitment of Escrow Agent/ Escrow Bank)
1. Background
The electricity supply chain in Ghana involves the generation of electricity by the Volta River Authority (VRA) and Independent Power Producers (IPPs); transmission by the Ghana Grid Company (GRIDCo) and distribution by the state-owned Electricity Company of Ghana Limited (ECG) and the Northern Electricity Distribution Company (NEDCo). Whilst the state-owned ECG and NEDCo sell electricity to end-users, as per the tariff approved by the Public Utilities Regulatory Commission (PURC), VRA also serves a certain market of bulk customers, including the large mining companies and industries.
Ghana’s Electricity Value Chain has over the years faced a number of challenges such as inadequate cash flow resulting from Uncollected Revenue. This has led to inequitable distribution of revenue receipts among creditors and power producers. In order to address this challenge, Cabinet approved the implementation of a Cash Waterfall Mechanism (CWM) in July 2017. CWM, one of several transparent financial instruments, is a key tool to ensure equitable and predictable distribution of revenue to all Stakeholders in the Electricity Value Chain.
2. Objectives
The CWM will ensure that all stakeholders in the power supply chain benefit proportionately from the total revenue collected by ECG and VRA in a transparent manner.
The specific objectives of the CWM are to:
• ensure the allocation and payment of collected revenue to all utility service providers and fuel suppliers in accordance with the approved tariffs allocation system;
• ensure each fuel supplier receives its proportion of allocated revenues based on prior agreed terms; and
• monitor all regulated and deregulated revenue collections and ensure compliance with the distribution mechanism and operational guidelines.
The operation of the mechanism would involve the tracking and sweeping of ECG revenue from the regulated market into an Escrow account on a weekly basis. The net revenues would then be allocated to the power producers, fuel suppliers, Ghana Grid Company (GRIDCo), ECG, and VRA in accordance with Public Utilities Regulatory Commission (PURC)’s approved percentage allocation to ensure that all players would have some liquidity at any point in time. The actual disbursement of the allocated revenue to the parties involved in the CWM will then be done by a Paying Bank that will liaise with the Escrow Bank based on written instructions received from the Trustee /Administrator of the fund. The Paying Bank is expected to put in place a revolving credit facility to fill expected shortfall (if any) in the cash to be received by the beneficiaries.
3. Scope of Work:
The Escrow Agent shall perform the following functions:
• Establish and operate an Escrow Account for the lodgment of all revenues from ECG’s regulated billing clients.
• Receive all revenues from ECG’s Headquarters accounts into the Escrow Account;
• Transfer funds to Payee Bank based on written instructions from the Trustee,
• Submit transactions / lodgment reports to Trustee with copies to the Ministry of Energy and Ministry of Finance (Sponsors);and,
• Send monthly reconciliation report to the Trustee with copies to the sponsors.
4. Duration
The Escrow Agent will be appointed for an initial contract period of two (2) years, which will be renewable subject to satisfactory performance.
5. Deliverables and Reports
In the performance of this assignment, the Escrow Bank will be guided by the Operational Guidelines which will be made available at contract signature. All reports and deliverables will be specified in the Operational Guidelines.
6. Key Stakeholders
In addition to the Sponsors other key stakeholders identified to aid in the performance of the assignment include the following:
• Volta River Authority;
• Electricity Company of Ghana Ltd;
• Ghana Grid Company;
• Bui Power Authority;
• Northern Electricity Distribution Company;
• PURC;
• IPPs; and,
• Fuel suppliers
The above stakeholders may be in a position to provide useful information for the smooth implementation of the scheme. Any other stakeholder that the Trustee / Administrator identifies in the course of the implementation of the CWM could be contacted for assistance, with prior notice to the Sponsors.
- Source of Funds:
- -
- Region:
- -
- District:
- -
- Contact Person:
- The Acting Chief Director Ministry of Energy, Accra Attn: Head, Procurement and Supply Chain Unit Ground Floor Room 004, Accra
- Email :
- Tel :
- Fax :
- Website: