Ghanaians will experience improved performance, reduction in current losses of Electricity Company of Ghana (ECG), as well as lowering of electricity tariffs when a private investor takes over the operations and management of the nation’s power utility company.
Owura Sarfo, Chief Executive Officer of Millennium Development Authority (MiDA), gave the assurance, told Editors in Accra that by the third quarter of next year, a private investor would be in place to handle the operations of ECG and inject more capitals into its operations.
In his words, “If ECG was able to reduce its cumulative losses, which stand at 35 percent, by half, it would be making US$150 million every year and this should facilitate progressive lowering of tariffs.”
He added, “The energy’s sector problems have been tackled under the public management for years but have not been resolved. On the contrary, performance has been declining.”
He explained that increasing private sector participation in the sector holds promise for improvement in operational and financial performance of the utility.
The MiDA CEO explained that under the agreement signed between Ghana and the United States governments in August last year, the Millennium Challenge Compact Two provides Ghana with a grant of US$498.2 million to improve the power sector, which is also called the ‘Power Compact’.
According to him, the major project under the Ghana Power Compact is the Electricity Company of Ghana (ECG) Financial and Operational Turnaround Project, which is designed to transform ECG into an efficient and financially strong institution through private sector participation (PSP).
The ECG Financial and Operational Turnaround (EFOT) Project entails private sector participation in ECG, modernising utility operations, reduction in commercial losses and improvement of revenue collection rates, technical loss reduction and outage reduction.
About $300 million of the MCC grant is being invested in ECG, and the Government of Ghana is committing at least US$37.4 million of its own money.