Rwanda Energy Group subsidiaries under probe over missing funds

Tuesday October 10 2017

PAC members queried the mismanagement of funds by EDCL and EUCL. PHOTO | CYRIL NDEGEYA | NMG

PAC members queried the mismanagement of funds by EDCL and EUCL. PHOTO | CYRIL NDEGEYA | NMG 

By IVAN R. MUGISHA
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Two subsidiaries of the Rwanda Energy Group have come under fire for questionable accounts in their 2015 operations, after several contradictions were found in their books.

For instance, Rwf15.2 billion ($18m) was misrepresented as a liability in financial statements given by the Energy Development Company Ltd (EDCL) — one of the subsidiaries under REG — to the auditor-general.

The other subsidiary, Energy Utility company Ltd (EUCL), was found culpable of not including unutilised fuel worth Rwf568 million ($673,432) in its financial statements, among other examples of its financial mismanagement.

REG was also unable to account for Rwf8 billion ($9.5m), which the body claimed to have lost when the Energy Water and Sanitation Authority was split into two autonomous utilities.
For five hours on September 27, EUCL officials — the parastatal charged with selling electricity — were at pains to answer questions posed by the Parliamentary Audit Committee (PAC).

The previous day, EDCL, which is charged with developing and generating electricity also faced PAC.

The misappropriation was discovered three weeks after the arrest of EDCL managing director Emmanuel Kamanzi over violation of procurement procedures.

“Fortunately, this is not a corruption case; the poor financial statements are a reconciliation issue that came about during the restructuring of the old body, which was split to form both EUCL and EDCL,” said EUCL managing director Jean Claude Kalisa.

“We need to work on the mismanagement and poor financial statements that were provided,” he added.

Mr Kalisa said EUCL currently has a debt of about Rwf2 billion ($2.3m).

“When we saw the recommendations made by the auditor-general, we ensured the mistakes were found and corrected. That is why our rate of implementing the recommendations is at 92 per cent,” he said.

Whereas EUCL is doing well on working on the recommendations made by the auditor-general, EDCL is not. The firm was listed among the worst performing government entities, failing to implement 82 per cent of the auditor-general’s recommendations.

Both utilities are valued at Rwf454.4 billion ($538m).

Chair of PAC, Juvenal Nkusi, told those responsible for mismanagement of the utility firms that they face prosecution.

“The heads of the these utility firms need to find those culpable so that they face the law,” Mr Nkusi said in an interview. 

According to the auditor-general’s report, debt balances amounting to Rwf6.6 billion passed on to EUCL from the government in 2014 were understated by Rwf3 billion in 2015. 

The auditor-general’s report also found unaccounted bank balances of Rwf2 billion ($2.3m) belonging to EUCL.