For more than three decades, Ghana has pursued various reforms to improve the performance of its electricity distribution sector. Despite significant investments in generation capacity, transmission infrastructure and distribution networks, persistent challenges—including high technical and commercial losses, unreliable revenue collection, ageing infrastructure, and mounting financial pressures—continue to undermine the sector's sustainability.
The debate has often centred on whether electricity distribution should remain fully public or involve greater private sector participation. However, this framing overlooks a more fundamental question: Can a single management model effectively serve a country with such diverse economic, demographic and geographic conditions? This calls for a Multi-Zone Lease Model.
Key features of the multi-zone lease model
The multiple-zone lease model offers a combination of benefits that no single-operator arrangement — whether a national concession or continued public management — can replicate. The multi-zone lease model is one in which private operators manage distinct distribution zones under performance-based contracts, while the government retains ownership of electricity assets. Such a model will align operational incentives with regional realities, encourage competition through benchmarking, attract targeted investment, and create a more resilient and customer-focused electricity distribution system. The key features are:
• Geographic specialisation: Different private operators, selected for their specific competencies, can apply distribution strategies optimised for the specific loss drivers, consumer profiles, and infrastructure conditions of each zone — rather than a one-size-fits-all approach applied imperfectly across a diverse national territory.
• Benchmarking and performance pressure: The existence of multiple operators in comparable contexts enables the regulator to compare performance across zones, identify best practices, and apply regulatory pressure on underperforming leaseholders — replicating the competitive pressure of a market without actual competition in the same geographic area.
• Reduced political risk per transaction: Awarding five or six separate zone leases — each representing a manageable transaction — is less politically exposed than attempting a single, nationally visible concession for the entire ECG network. If one zone lease fails or requires renegotiation, the others continue operating, preventing systemic disruption.
• Preserved government ownership: Like all lease/affermage arrangements, the multiple-zone model keeps distribution network assets firmly in public ownership. The government, through ECG and NEDCo, retains the infrastructure that consumers and politicians regard as a public asset — while importing private operational efficiency.
• Financially viable lease structures: Zone-specific lease fee calculations — reflecting each zone's revenue density, loss rate and investment requirements — allow the government to design financially viable arrangements for commercially challenging zones (such as the north) while capturing appropriate lease returns from high-revenue zones (such as Greater Accra).
The future of Ghana's electricity distribution sector depends not simply on whether the operator is public or private, but on whether the institutional design reflects the country's diverse economic and geographic realities. A differentiated multi-zone lease model offers a pragmatic middle path—preserving public ownership of strategic assets while introducing private-sector efficiency, accountability and innovation through carefully structured performance-based leases.