IMF calls for tariff increase for energy sector cost recovery
The International Monetary Fund (IMF) has asked Ghana to implement strict reforms to empower utility service providers to recover their cost for reliable and sustainable power for households and industry use.
Ms Catherine Pattillo, an IMF Deputy Director and Mr Luc Eyraud, Division Chief, African Department, IMF, said this during a press briefing in Accra.
They also called for an enabling environment for private sector players to increase renewable energy use, and urged other African countries facing energy crisis to replicate same.
Ms Pattillo noted that like many other African countries, Ghana’s current tariff setup did not engender high-cost recovery by utility service providers, hindering their operational capabilities.
“Sometimes, the setup of the energy sector does not provide the utilities the ability to have cost recovery from the charges that they make in order to operate profitably and efficiently and supply energy as needed,” she said.
On the part of the Fund, she said, “we’re always discussing with countries on how to make sure that their energy sector, which often involves a number of State enterprises are well managed to recover their cost and provide services.”
Mr Eyraud emphasised the importance of recalibrating tariff systems, noting that it would help to boost cost recovery.
He also called on the government to institute mechanisms that would increase the country’s share of renewable energy through enhanced private sector participation.
He mentioned South Africa as one country on the continent that had been doing well in the area of renewable energy, “by bringing in more private producers and reducing the barriers to enter into the market”.
For the past few weeks, Ghana has been experiencing some erratic power outages largely attributed to financial challenges to procure fuel for some power plants to operate to full capacity.
In an interview with the Ghana News Agency last week, Nana Amoasi VII, Institute for Energy Security (IES), underscored the importance of resourcing the Electricity Company of Ghana (ECG) to solve the current power outages.
“We expect the Ministry of Energy to coordinate and work with the Ministry of Finance to find alternative funding sources to deal with the challenge, thus, to procure fuel to get some of the power plants online,” he said.
Meanwhile, the President, Nana Addo Dankwa Akufo-Addo, during his address at the 2024 May Day celebration in Accra, expressed optimism about sustained power, indicating that some challenges in the sector had been resolved.
“Over the period, the issues surrounding transformers and gas supply have been successfully resolved, resulting in sufficient improvement in power supply reliability,” he said.
Source: GNA