Cabinet to decide on options of private participation in ECG

Cabinet will soon deliberate on the most suitable of three recommended options: Entity concession, multiple lease, and service franchise, for private sector participation in the Electricity Company of Ghana.

That will be followed by the establishment of a project implementation committee and recruit a transaction advisor to ensure transparency and ensure local content and participation.

Mr John Abdulai Jinapor, Minister of Energy and Green Transition, said this on Wednesday after receiving a report on the findings of a seven-member committee tasked to explore options for private sector involvement in the operations of the Electricity Company of Ghana (ECG).

He said the move was to address financial and operational inefficiencies, ensuring a reliable and affordable electricity supply.

Mr Jinapor noted that the ECG incurred over GH¢1 billion in monthly deficits, affecting the entire power sector. 

“Clearly, something must be done. Our goal is to reform the sector, improve efficiency, and increase revenue collection,” he stated.

Mr Jabesh Amisah-Arthur, the Chairman of the Committee, consulted about 285 individuals and 35 organisations to assess the challenges facing ECG.

He said the team identified nine major issues grouped into four areas, Governance and Management and Issues with leadership and procurement.            

Mr Amisah-Arthur said Operational Inefficiencies: High commercial, collection, and technical losses, Financial Challenges, Foreign exchange losses and tariff gaps, Customer Dissatisfaction: Widespread complaints about ECG services.

He stated that after evaluating eight private sector participation models the team recommended Single Private Operator Model – One entity manages ECG’s operations, Multiple Lease Model–ECG divided into regional units, each managed by different private operators and Service Franchise Model – thus private sector manages low-voltage distribution.

“Essentially, we identified nine major challenges that are impacting the performance of distribution facilities in the country, and these nine have been put in four groups,” he said.

“The first group has to do with the administrative set-up, and we see problems with governance, we see problems with management, and then we also see procurement problems.”

The committee, he said, identified operational issues that were impeding the performance of the distribution function, and resulted in high losses, both in terms of commercial and collection, and high losses in terms of technical and on-account endeavours.

Source: GNA

The post Cabinet to decide on options of private participation in ECG appeared first on Ghana Business News.

Read Full Story