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MIRA
INFORM REPORT
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Report Date : |
11.01.2007 |
IDENTIFICATION
DETAILS
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Name : |
VOLTA RIVER AUTHORITY (VRA) |
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Registered Office : |
Electro-Volta House, 28TH February Road Accra, Ghana P.O.Box MB 77 Accra Ghana |
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Country : |
Ghana |
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Date of Incorporation : |
26th April 1961 |
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Legal Form : |
Public Corporation |
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Line of Business : |
Generation and Transmission of
Electricity |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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Status : |
Satisfactory
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Payment Behaviour : |
Regular
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Litigation : |
Clear |
REPORT SUMMARY
Name: Volta River Authority (VRA)
Address, Electro-Volta House
28TH February Road Accra, Ghana
P.O.Box MB 77 Accra Ghana
Tel: 233-21 664941/233-21-221124
Fax: +233-21-662160
E-mail: paffairs@vra.com.
WEBSITE: www.energymin.gov.gh/vra.htm.
Date Incorporated: 26th April 1961.
RC No.: N/A
Share Capital: N/A
Managing Director/CEO: Mr. Gilbert Ohane Dokyi
Legal Form: Public Corporation
Line of Business: Generation and Transmission of Electricity
Product/Service: Electrical Power generation, electrical power distribution
Number of Employees: 10,000
BUSINESS RISKS
BUSINESS ENVIRONMENT
Presently, Ghanaian economy is improving with higher
capacity utilization in the industries and low inflationary trends. Moreover,
there is influx of foreign investment into the country.
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NATURE OF BUSINESS
The Volta River Authority (VRA) formally came into existence in 1961. The primary function is to generate power and supply electricity in Ghana.
MANAGING DIRECTOR/CEO
Mr. Gilbert Ohene Dokyi, is the chief executive officer of the subject. He is assisted by his senior managers with wealth of experience in power and steel.
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SUBJECT AND ITS INDUSTRY
Subject is the sole supplier of power and electricity in Ghana. It has a monopoly power within Ghana.
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CASH FLOW AND PROFITABILITY
Despite our visit to subject office, financial information was not provided.
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MARKET COVERAGE
Voltage River Authority (VRA) distributes network encompasses towns, cities and villages in Ghana
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PRODUCT/SERVICE
Electrical Power distribution
Electrical power generation
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SOURCE OF RAW MATERIALS
Raw materials are sourced both locally and abroad.
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PRODUCT LIFE CYCLE
Subjects services life cycle is long. However, it needs proper maintenance by the subject and the end users.
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THE SUPPLY CHAIN
Subject purchases equipment from its agent from
overseas and offer its services to customers in Ghana.
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TECHNOLOGY CHANGE
Volta River Authority is adapting to technology and
changes in its line of business by upgrading its equipment to offer excellence
service that surpass customers expectation in Ghana.
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COMPETITIVE ADVANTAGE
This is a monopolistic sector, there is no competition within the sector, but the subject offers excellence services to the populace.
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COST LEADERSHIP
Subject endeavour to operate at minimum cost to all
sectors of the economy through the formulation, implementation, monitoring and
evaluation policies. Meanwhile, competition was not allowed within the sector.
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BREAKTHROUGH PRODUCT/SERVICES
Subject services carried equal market strength and
values.
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COMPETITIVE FORCES
Competition was not allowed within the sector. The
legislative Act 46 of 1961 has empowered Volta River Authority to be the sole
supplier of electricity in Ghana.
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SUPPLIER POWER
Volta River Authority is the sole supplier of
electricity. Subject has the monopoly power to reduce and increase the price of
its services.
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SWOT ANALYSIS
Strength: High quality and excellence services
Weakness: Lack of enough equipment.
Opportunities: Large market.
Threats: changes in government policies.
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SHAREHOLDER
This is a corporation that is owned and run by the
government of Ghana.
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BUYER POWER
The general public depend solely on the services of
subject because is the sole supplier of electricity. Any one particular
customer cannot exercise undue influence on the subject pricing policy.
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AFFILIATED COMPANY
Volta River Authority Operates under the ministry of
Power and steel in Ghana.
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PREMISES
Subject head office is situated at 28th
February Road, Electro-volta House Accra. It is an eleven storey Building
painted in milky colour. It is owns by the Government of Ghana subject has
sub-station in major town in Ghana.
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THE BOARD
The Board of the Authority comprises mainly of
institutional members representing the interests of major customers.
There are eight members including the chairperson.
NAME DESIGNATION
Mr. Kwabla Kalitsi Chairperson
Mr. Gilbert Ohene Dokyi Chief Executive officer
Mr. Nusa Adam Managing Director, Electricity Company Ghana
Mr. Ron Helton Managing
Director – Volta Aluminum
company
Limited
Mr. Kofi Ansah Chief
Executive Mineral commission
Professor Baeta University
of Ghana, Department of Physics.
Mr. Wiafe (Deputy
chief Executive, Irrigation Adjetery
Development
Authority.
Mrs. Theresa Akuffo Freeman Secretary.
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EMPLOYEE
Ten thousand employee nation wide.
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OWNERSHIP STRUCTURE
Shareholding percentage
Foreign - Nil
Ghanaians - 100%
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MARKETING
REPORT
Pricing Policy: Avoidable pricing (not a competitive market).
Turnover/Service: N/A
Advertisement/Promotion: Print and Electronic media
Location: Operation
office is situated nation wide.
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ECONOMIC TREND 2006
Foreign Exchange to US$ cedi
9,400
Interest Rate (lending) 14.5%
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GLOBAL ECONOMIC TREND
Globally, Energy sector is large and the market is not yet over utilized. Moreover, there is growth prospect for players within the sector.
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SUPPORT FACILITIES
Power generating plant, access roads computers, and
operating vehicles.
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BRANCHES
Subject has sub-station in town and cities in Ghana.
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COMPETITORS
Subject has no competitors, Volta River Authority is the only company that is empowered to supply electricity in Ghana.
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FINANCIAL
INFORMATION
Financial information was not provided by the
subject’s principal despite numerous call and visit to their office.
JUDGMENT ABOUT SUBJECT’S CREDIT
STANDING
Character
Mr. Gilbert Ohene Dokyi is the chief executive officer
of the corporation. He is well known in the government of Ghana and he commands
high respect and influence.
Ability
Subject have ability enter into contractual
obligations as stated in legislative, Volta River Development Act, Act 46, 1961
in Ghana.
Means
The corporation is owned by the government of Ghana.
It runs by well-qualified professional. Henceforth, subject has the financial
muscle to service any credit facility.
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PURPOSE
Information not provided.
AMENDMENT
Subject can be considered good for long term credit
assistance.
INTEREST
Prevailing interest rate will be ideal as stipulated
by the monetary authority.
COMMISSION
Subject is willing to pay commission that is reasonably agreed.
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VITAL GOVERNMENT CONTACT
This is government institution. Henceforth, members of the Board are well connected to the government.
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PUBLIC RECORD
The image of Volta River Authority has not been
dented, as there is no case of serious litigation over the years.
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BANKER
Ghana Commercial Bank
Ecobank Ghana.
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EXECUTIVE MANAGEMENT STYLE
NAME: Mr. Gilbert Ohene Dokyi
Address: Electro-Volta House, 28, February Raod, Accra.
Nationality: Ghanaian
Position in the company:CEO
Marital Status: Married
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GOVERNMENT
REGULATION
Volta River Authority is regulated by the ministry of
power and steel.
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LABOUR ISSUE
Volta-River Authority treats its employees well.
Moreover, the relationship between the subject and its employees is cordial.
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INFRASTRUCTURE
PROBLEMS
The provision of basic amenities has witnessed
tremendous improvement in Ghana economy.
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CORRUPTION
ISSUES
The issue of corruption has been brought down to single digit by putting in place laws to arrest the situation.
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TERRORISM
Presently, there is no trace of terrorism in Ghana except communal clashes in towns and villages.
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LOCAL DIVIDEND PAYOUT REQUIREMENT
Subject is a public corporation not a profit-making organisation. Henceforth, government of Ghana is only the stakeholder.
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SOCIAL/COMMUNITY
RESPONSIBILITY
Subject’s interest in the provision of electricity to
the general populace at available price.
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STOCK
MARKET SHARE MOVEMENT
Subject is a public corporation henceforth its shares
are not quoted on the floor of Ghana stock exchange.
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CONCLUSION AND RECOMMENDATION
Volta River Authority was established in 1961 by Legislative Volta River Development Act, Act 46 to be a sole Supplier of electricity to entire community in Ghana.
It is a going concern business meanwhile, financial information was not provided.
We recommend for normal business relationship.
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
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<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |