Agyarko courts private investors to bolster power sector
Government is seeking strong private sector participation in the energy sector in the quest to improve the country’s power infrastructure and specifically improve the financial health of the power distribution companies, Energy Minister, Boakye Agyarko, has hinted.
Speaking at the maiden National Policy Summit in Accra, he indicated that the poor liquidity state of power distribution companies has been the Achilles heel in government’s quest to provide reliable and cheap power to spur industrialisation and growth of businesses in the country.
“The Electricity Company of Ghana (ECG) currently has a negative working capital of US$2billion with about 21 percent of transmitted power recorded in losses.
Government can adequately supply reliable and cheap power only when we are able to fix the poor balance sheets of the power distribution companies,” he said referring to the ECG and the Northern Electricity Distribution Company (NEDCo).
According to the Africa Centre for Energy Policy (ACEP), the main challenges facing the country’s power sector are comprised of generation and transmission risks which include the continuous reduction in the spinning reserves, over reliance on hydro and gas as well as transmission investment challenges.
Mr. Agyarko, who was addressing a gathering of energy sector stakeholders, said intensive investment in the power sector, and most significantly the power distribution companies, will help to improve their technical and operational performances to stem transmission and revenue losses.
The energy minister further advocated the need for strategic power agreements that will facilitate the evenly distribution of power loads across the country and low power tariffs.
He added: “Most power agreements are deal-driven but rather strategic; that’s how we can ensure that power is transmitted across the country rather than concentrated. This will keep the national grid busy and ensure low pricing of power.”
Mr. Agyarko also hinted of a power sector master plan that will among others guide the attainment and sustenance of adequate generation resources and margins that will lead to ensure low cost of power in the long term.
He said the master plan will aid efforts at diversifying the country’s power mix, ensure competitive procurement of power and enhance private sector involvement.
The two-day National Policy Summit is an initiative of the Ministry of Information with support from the Business and Financial Times (B&FT) that provides the platform for selected ministries to engage stakeholders on specific policies and how they will be implemented.
The platform is also designed to enable the private sector identify how to tap into or be part of government’s numerous policies.