IPPs concerned about ECG, tariffs and investment security

Discussions at the Powering Africa investment summit in Accra, were dominated by investment security concerns from independent power producers (IPPs), and Ghana’s electricity tariff regime which they find unattractive.

The concerns of IPPs also bordered on the efficiency of the energy offtaker – The Electricity Company of Ghana (ECG) and loss margins in energy transmission and distribution.

Acting Managing Director of the Electricity Company of Ghana (ECG) Robert Dwamena conceded that much as there is the need for injection of capital into the sector, there is the need for a credible offtaker and a tariff regime which will ensure good recovery of investments and the ECG on its part is embarking on a financial and operational turn around to make it more “financially viable” and boost investors’ confidence.

The company is hugely indebted to the Volta River Authority.

“We are committed to collecting about 95 per cent of our bill revenue and also be able to recover not less than 10 per cent of our debt. As part of this we have a task force in all the districts which are ensuring that this is achieved,” he said

Other revenue mobilization measures he said, were upscale of prepayment meter deployment, which is hoped to reach 600,000 by the end of the year, improved customer service, increased cost and returns-sensitive selectivity on projects, and negotiations with the Public Utilities Regulatory Commission (PURC) to adjust tariffs along with the drift to thermal energy.

Mr Dwamena said a task force had been constituted to check the integrity of electricity meters, and had recovered GH₵2 million in its first month

The company according to the Acting MD, is also working with the National Communications Authority (NCA) to strengthen its ICT networks and minimize outages and stagnation in electricity vending resulting from ICT and network challenges.

“We are doing all this to give investors the confidence that if they invest in the power sector they will be able to get their monies back. Whether they invest in production, transmission if the offtaker is not credible; if the offtaker is not able to collect monies and make sure that producers are paid, the sector will still not be attractive”, the Acting MD said.

By Emmanuel Odonkor