“Open up ECG for massive competition”

An economist, Kwame Jantuah, says Electricity Company of Ghana (ECG) must be allowed to open up for massive competition from other independent power distributors to provide consumers with better choice sources of energy and power production.

“The ECG should open up for other private companies to come in and compete with ECG. It gives the consumers a better choice of electricity.”

According to Mr. Jantuah, “Competition will bring the best out of the ECG: we need to open-up the ECG; that should bring efficiency and effectiveness from them”.

Speaking at the just-ended Ghana Economic Forum (GEF) on a wide range of economic sectorial issues, Mr. Jantuah observed that: “It will be a good thing for Ghana to start looking at solar now”.

The country has been facing erratic power cuts for the past three years, resulting in job-losses and businesses folding-up, which has called for a holistic approach from policymakers.  

Ghana’s energy sources have mostly come from hydro, but exploring other areas like solar, coal, ocean-waves among others will help reduce the burden on the national grid, Jantuah suggested.

Commenting on the adoption of coal as an alternative source for energy production, he questioned the sustainability of ‘clean-coal’ to supplement the country’s energy sector; asking that if the major producers decide to put a huge price  on coal, how do we raise money to finance its procurement?

Government in February announced its readiness to select transaction advisors for the privatisation of the state power distributor, ECG – for which it has been decided to focus on Private Sector Partner (PSP) of choice [for ECG] in either a partial privatisation or a concession contract.

With a concession, “The government will enter into an agreement with the private partner where the private partner will have the exclusive right to operate, maintain and carry out investment in ECG for a given number of years. 

“The Private Partner will have responsibility over the operation and maintenance of all assets and investment during the period, but government will remain the sole owner of ECG. 

“Once the concession expires, the government will resume total control of the company. The number of years under this concession option is typically around 20 to 30 years.”

The generational deficit facing the country stands at 400-700megawatts in order to meet exponential growth and solve the energy crisis.

Mr. Jantuah’s comments follow a recommendation from Dennis Brown, a representative from Price Waterhouse Coopers (PWC) who suggested that private sector participation in electricity management is the way to go. 

He blamed the media for a huge capacity gap in reporting on the energy and power sector.

“We should keep journalists who are specialised in power, energy and petroleum , because  for me this  directly affects the ordinary Ghanaian.

“Ghana should do more with regard to implementation as well as holding leaders accountable,” he remarked.

Dr. Henry Alhassan from the Export Development and Agricultural Investment Fund (EDAIF), urged government to use the natural resources to develop the country. “It is important to focus on our priority areas to drive the economy,” he said. 

Mr. Isaac Newton, a representative from African Services Network (ASN) -- a financial services firm, also proposed a special fund that needs to be set aside to construct future dams for increasing the country’s generating capacity. 

“I think we need a special fund to construct additional dams that can generate about 6,000megawatts to add to the generation capacity,” he said.