By Elikplim Kwabla APETORGBOR (Dr)
The Electricity Company of Ghana (ECG), as the bedrock and cornerstone of Ghana’s energy sector, plays a pivotal role in national development. Despite its strategic importance, ECG faces significant operational and financial challenges.
With targeted reforms and innovative strategies, ECG can evolve into a robust and profitable entity, bolstering fiscal consolidation and economic stability.
Key challenges and strategic recommendations
- Revenue leakage in SHEP metres
A significant number of metres under the Self-Help Electrification Programme (SHEP) remain unbilled due to non-capture in ECG’s database.
To mitigate this:
- Conduct a full audit of SHEP metres and integrate them into ECG’s billing system.
- Transition to prepaid metres for enhanced accountability and upfront revenue generation.
Leveraging technology for efficiency
Outdated monitoring systems undermine ECG’s ability to track usage and prevent theft. Adopting geospatial technology and real-time monitoring systems can revolutionise metre tracking, minimise losses, and enhance operational efficiency.
Realistic tariffs for sustainability
Tariff-setting often succumbs to political influence, jeopardising cost recovery. Advocating for tariffs reflective of actual costs—while protecting vulnerable consumers—is critical. Similarly, using realistic exchange rates for tariff calculations can cushion against forex volatility.
Competitive procurement practices
Procurement inefficiencies inflate costs and drain resources. A shift to transparent and competitive procurement processes, complemented by independent audits, can ensure value for money and strengthen accountability.
Diversifying the energy mix
Over-reliance on thermal generation exposes ECG to risks tied to fuel costs and supply disruptions. Investing in utility-scale solar power plants can stabilise energy supply and costs while positioning ECG as a renewable energy leader.
Strengthening customer engagement
ECG’s Customer Service Department is a crucial revenue-collection gateway. Empowering this unit with modern technology and local partnerships can boost collections, resolve disputes, and improve consumer relations.
Tackling energy sector debt
ECG’s US$1.82billion debt to Independent Power Producers (IPPs) is unsustainable. Exploring mineral resource-backed debt swaps and renegotiating terms can significantly reduce arrears, enhancing fiscal sustainability.
Transitioning to electric vehicles (EVs)
ECG’s fleet operations are costly and environmentally unsustainable. Replacing 90 percent of internal combustion vehicles with EVs can lower operational costs, align with Ghana’s clean energy goals and establish ECG as a sustainable energy pioneer.
Merging NEDCo and ECG
Operating as separate entities has led to inefficiencies and redundancies. A merger would streamline operations, cut costs and strengthen service delivery through unified management and expanded resources.
Empowering ECG to manage revenue
The Cash Waterfall Mechanism Committee (CWMC) currently controls ECG’s revenue allocation, limiting its operational flexibility. Restoring revenue management to ECG would improve accountability and resource prioritisation.
The challenges confronting ECG are formidable but surmountable with focused leadership, strategic investments and bold reforms. Transforming ECG into a self-sufficient and efficient entity is not only vital for its survival, but also essential for Ghana’s economic resilience and growth.
