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Volta River Authority to restructure and call for cost reflective tariffs in Ghana

Volta River Authority
Former chief executive calls for cost reflective tariffs for the Volta River Authority in Ghana.

In West Africa, former chief executive of the Volta River Authority Kweku Awotwi told local news agency, GhanaWeb, that he is unhappy with tariffs approved by the Public Utility Regulatory Commission (PURC), especially for electricity.

According to Awotwi, it would be impossible for the Volta River Authority to continue operating efficiently while the PURC continues to under-price electricity in the country.

The PURC had increased electricity tariffs by a substantial 51.73% as from 1 July 2015.

Speaking at this year’s Ghana Journalists Awards ceremony, Awotwi indicated that the Volta River Authority could better execute its mandate in producing sufficient power for the country if costs of producing the utility are recovered.

He asked: “How does the Volta River Authority produce sufficient power when […] the PURC approves electricity tariffs that are pegged to about a third of what it takes to run Volta River Authority’s thermal plants?”

Tariffs at Volta River Authority unsustainable

According to him, recently a ship bringing crude oil to the power producer sat on the high seas for almost two months because neither the Volta River Authority nor government could open the relevant letters of credit for the discharge of the crude oil.

Awotwi, who is also the Board Chairman of the Multimedia Group, is suggesting that the PURC approves electricity tariffs that are commensurate with the cost of producing power at the Volta River Authority.

Volta River Authority is rumoured to be indebted to the West African Gas Pipeline Company to the value of $82 million and many Independent Power Producers and other companies it does business with, reported GhanaWeb.

Volta River Authority to restructure

In further news, an African Press Organisation news release revealed that Government intends to split the Volta River Authority into two separate entities to make it more efficient in the generation of power for the country.

A new publicly owned entity will be established out of the existing Volta River Authority to concentrate on thermal generation in partnership with the private sector while the remainder will concentrate on hydro generation.

Infrastructure development

The national interconnected transmission network is also being upgraded with the Grid Company of Ghana Ltd (GridCo) investing in new 330kv, 225kv and 161kv lines.

Ghana’s current suppressed peak demand is about 2,400MW, however only 1,600MW of capacity is available at peak and 1,400MW at off-peak leaving a deficit of about 800MW at peak.

According to the statement, Dr Kwabena Donkor, Minister of Power for Ghana, announced at the Africa Energy Forum in July, plans to push through Emergency Power arrangements to increase the supply situation.

The Ministry is taking steps to add in excess of 5,000MW generating capacity from natural gas, clean coal and renewable energy sources within the next five years.

More restructuring

To accelerate investments, Ghana is also restructuring the Electricity Company of Ghana Ltd (ECG) and the Northern Electricity Company Ltd (NedCo).

The restructuring aims to deliver more effective customer service to consumers and to strengthen their financials to be better off-takers of Power Purchase Agreements.




Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.