Financial challenges remain major concern for Ghana’s power sector – Electrical engineer

Electrical engineer Hesford Quaye-Larbi has highlighted financial instability as a key issue facing Ghana's power sector, emphasizing that the problem is compounded by significant electricity losses. Speaking on Joy FM's Super Morning Show, Mr. Quaye-Larbi noted that the current losses amount to approximately 27%. He explained that these losses occur when distribution companies are unable to recover revenue from a substantial portion of the electricity they supply, due to technical and commercial inefficiencies in the distribution network.

Mr. Quaye-Larbi used a simple analogy to illustrate the financial impact, stating that if a company delivers 100 units of electricity but loses 27 units, they only earn revenue from the remaining 73 units. This scenario results in a revenue shortfall, creating a broader financial strain on the sector, as distribution companies are still obligated to pay suppliers and independent power producers.

This financial predicament could also affect government revenues, as financially weak state-owned entities may struggle to fulfill their tax responsibilities. Mr. Quaye-Larbi called for a renewed focus on reducing these electricity losses and enhancing revenue collection as crucial steps toward restoring financial stability to the power sector.

He argued that a reduction in losses could yield substantial additional resources, potentially without an immediate need for higher electricity tariffs. "If we can recover that 27%, I can't quantify the exact amount, but it's significant," he stated. He also advocated for investment in transmission and distribution infrastructure to mitigate technical losses and enhance the efficiency of electricity distribution.