Govt will explore private participation in ECG — Minister designate for Energy

The Minister of Energy and Green Transition designate, John Abdulai Jinapor, has said the government will explore private sector involvement in the operation of the Electricity Company of Ghana (ECG) to improve its efficiency and revenue collection.

He said the government was in the process of setting up a seven-member committee with the mandate to evaluate best practices and recommend the most suitable privatisation framework to the government.

The Yapei-Kusawgu Member of Parliament (MP) added that the committee comprised legal, financial, and technical experts, industry stakeholders and consumer representatives.

“We aim for a transparent and competitive process, ensuring local content participation and setting clear key performance indicators for measurable progress,” Mr Jinapor explained.

He stated this when he appeared before the Appointments Committee of Parliament yesterday.

He said the outcome of the committee’s work would determine whether to adopt a concession model or full privatisation to put the company on the path to success.

Mr Jinapor said if approved as the sector minister, he would ensure that the preliminary work is completed within six months.

“Our goal is to implement this within the year, using lessons from previous concessions as a foundation,” he added.

Diligence

However, he stressed that while private sector participation in the company was being explored, he was opposed to the format used in past agreements under the Power Distribution Services (PDS) arrangement.

“I have always maintained that private sector participation is crucial at the distribution level, particularly in areas such as billing and collection”.

"This notwithstanding, I believe the PDS model can be improved upon for better outcomes,” Mr Jinapor said.

Losses

The Minister of Energy and Green Transition designate said ECG’s current system losses, which were estimated at 40 per cent — comprising technical and commercial losses – called for urgent reforms to address inefficiencies.

He assured Ghanaians that the process would be open and inclusive to modernise ECG operations and secure reliable energy services for the country.

“We are clear in our minds about the direction we want to take. This will be done transparently and in the best interest of the people,” he said.

Smart meters

Mr Jinapor disclosed that out of the 5.2 million meters ECG had, 4.8 of them were active, with three million of the active meters working properly.

"A minimum of 2.9 million will have to be changed to smart meters to meet the market needs," he said.

Again, the minister-designate said, the transition to smart meters would not only improve revenue collection but would also ensure efficiency at the company.

Gold 4 Oil

Responding to a question on what he made of the Gold for Oil policy that was implemented by the previous administration, the minister designate said there would be a review of the policy to see the best module to adopt.

He said the Gold Board that the current government intended to constitute would handle those issues in a better way.

VRA, GRIDCo, ECG merger

On whether the government would merge the three energy sector players, ECG, the Volta River Authority (VRA) and Ghana Grid Company Ltd (GRIDCo), the Minister of Energy and Green Transition designate stressed the need to consolidate expertise within the country’s energy sector to enhance efficiency and support the country’s transition to renewable energy.

He emphasised the need for reorganising technical teams across hydro, thermal, and renewable energy operations, grouping the expertise into various technical areas to improve specialisation and reduce system losses.

“We need to bring all renewable experts together under one umbrella. This will sharpen the focus on green energy initiatives as we prioritise the ministry’s mandate on green transition.

Similarly, hydro and thermal technicians should be under one so that procurements and all  can reduce losses and increase efficiency,” Mr Jinapor explained and discarded any intention to privatise the three state-owned companies.

He argued that centralising operations would enable a single energy company to manage receivables, distribute resources, and optimise the sector’s net gains, adding that it was not advisable to leave the country’s entire power generation resources in the hands of the private sector.

Energy crisis

Answering questions about how to ensure that energy costs remained affordable to the average Ghanaian, Mr Jinapor said there was a need for better currency management and operational efficiency.

“Many of the sector’s expenditures are dollar-denominated, leading to financial strain. Anchoring the currency is essential and this will require collaboration with the Bank of Ghana and the Ministry of Finance.”

“On our part, we must increase collections, reduce losses, and ensure grid resilience. Improved efficiency will help avoid unnecessary tariff hikes,” Mr Jinapor said.

“The first requirement for this sector is the anchoring of the currency.

A lot of the receivables, a lot of expenditures, are dollar-denominated.

So, the economic section that is, the Ministry of Finance and the Bank of Ghana, would have to work together to anchor the currency, because ECG alone has a forex (foreign exchange) loss of GH¢1.5 billion,” the Minister-designate stated.

On the part of the Energy Ministry, he said “We must increase collections, reduce losses, and ensure grid resilience, adding that “an improved efficiency will help avoid unnecessary tariff increases.”