Energy Ministry says proposed private sector participation in ECG is not privatisation

The Energy Ministry has dismissed assertions that its proposed private sector involvement in Ghana's Electricity Company of Ghana (ECG) signifies privatization. Richmond Rockson, the ministry's spokesperson and Head of Communications, clarified the distinction during an interview on Joy FM’s Top Story. According to Rockson, privatization entails the transfer of ownership, which is not the case in the proposed policy.

He emphasized that the government's April 2025 decision, approved by the Cabinet, does not involve the transfer of ownership of ECG or the Northern Electricity Distribution Company (NEDCo). The government aims to increase private sector engagement in the operations of these state-owned electricity distributors without transferring their assets.

The ministry highlighted that private sector participation is already present in various aspects of ECG and NEDCo’s functions, such as electricity sales and revenue collection. Rockson noted that the proposed arrangement intends to bring in the private sector to address structural and financial issues within the electricity distribution sector.

He cited recent reforms, including the consolidation of ECG's numerous bank accounts into a single holding account to streamline revenue collection and monitoring. These reforms have reportedly improved revenue management and reduced concerns over payments to Independent Power Producers (IPPs) and other service providers. Despite these improvements, Rockson acknowledged that ECG and NEDCo still face challenges in revenue collection.

The Public Utilities Regulatory Commission (PURC) data indicates that ECG is expected to collect around GH¢2.5 billion monthly, while NEDCo aims for approximately GH¢400 million. Currently, ECG’s collections have been as low as GH¢1.92 billion to GH¢2.1 billion, creating a significant disparity between expected and actual revenues.

The Energy Ministry maintains that while reforms are showing positive results, structural challenges within the electricity distribution sector necessitate further action.