The government is set to review three proposed models for private sector participation in the operations of the Electricity Company of Ghana (ECG) as part of efforts to address financial and operational inefficiencies within the power sector.
The options under consideration include an Entity Concession Model, a Multiple Lease Model, and a Service Franchise Model.
Cabinet is expected to deliberate on the most suitable approach before establishing a Project Implementation Committee and hiring a transaction advisor to oversee the process and ensure transparency, local content, and participation.
This was disclosed by John Abdulai Jinapor, Minister of Energy and Green Transition, on Wednesday after receiving a report from a seven-member committee tasked with exploring private sector involvement in ECG’s operations.
According to Mr. Jinapor, ECG currently incurs monthly deficits exceeding GHS 1 billion, a situation that poses a significant threat to the entire power sector.
“Clearly, something must be done. Our goal is to reform the sector, improve efficiency, and increase revenue collection,” he stated.
Findings from the ECG Assessment Report
The committee, chaired by Jabesh Amisah-Arthur, consulted 285 individuals and 35 organizations to assess ECG’s challenges. The team identified nine major issues grouped into four key areas:
Governance and Management: Weak leadership, procurement inefficiencies.
Operational Inefficiencies: High technical, commercial, and collection losses.
Financial Challenges: Foreign exchange losses and tariff gaps.
Customer Dissatisfaction: Widespread complaints about ECG services.
To address these concerns, the committee evaluated eight different models for private sector participation and recommended three:
Single Private Operator Model – A single entity manages ECG’s operations.
Multiple Lease Model – ECG is divided into regional units, each managed by different private operators.
Service Franchise Model – The private sector oversees low-voltage distribution.
Mr. Amisah-Arthur emphasized that ECG’s inefficiencies stem from administrative issues, poor governance, and operational weaknesses, which have resulted in significant financial losses.
He further explained that technical inefficiencies, poor revenue collection, and procurement challenges have worsened ECG’s financial position, making private sector involvement necessary to enhance service delivery and sustainability.
As the government moves forward with discussions, stakeholders will closely monitor the decision-making process, particularly regarding transparency, local participation, and the potential impact on electricity tariffs and service quality.
