Ghanaian residents can look forward to a brighter 2017 with private sector expected to sign a concessionaire to take over the operations and management of the national power utility.
According to Millennium Development Authority (MiDA), CEO Ing. Owura Sarfo, by the third quarter of 2017, a concessionaire would be in place to handle the operations of the Electricity Company of Ghana (ECG) and inject more capitals into its operations, Business Day Ghana reported.
Sarfo noted: “If ECG was able to reduce its cumulative losses, which stand at 35%, by half, it would be making $150 million every year and this should facilitate progressive lowering of tariffs.
“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.”
Private sector to transform energy sector
Sarfo noted that private sector intervention would significantly improve operational and financial performance of the utility.
He said: “In that position, the nation stands to attract investors, while industries and all other entrepreneurs get the opportunity to employ more hands and also open the chance for a greater number of people to become self-employed under the Power Compact.”
Sarfo explained that the Millennium Challenge Compact Two (‘Power Compact’), signed between the Ghanaian and US governments in August last year, provides Ghana with a $498.2 million grant earmarked for power sector improvement, media reported.
[quote]He added that the major project under the Ghana Power Compact is the ECG Financial and Operational Turnaround Project, which is designed to transform ECG into an efficient and financially strong institution through private sector participation (PSP).
This project allows for private sector participation in ECG, modernising utility operations, reduction in commercial losses and improvement of revenue collection rates, technical loss reduction and outage reduction.
Media reported that the project expects to increase private investments, as well as the management and operation of the ECG through a concession arrangement.
According to reports, the private investor is expected to manage and integrate the possessions of the state-owned power distributor from 2017 for a period of 25 years.