Editorial: Strategic interventions required in energy sector

The Electricity Company of Ghana (ECG) Board Chairman is dismissing calls for dissolving the board as misplaced, following the resignation of Samuel Dubik Mahama as MD of ECG.

However, the Africa Centre for Energy Policy (ACEP) recently called for removal of ECG’s board while citing reports of mismanagement and significant financial losses. Those losses, according to ACEP, soared from GH¢295million in 2017 to GH¢9.7billion in 2022.

In the melee, the Public Utilities Regulatory Commission (PURC) has also issued a firm rebuttal of allegations accusing it of culpability for ECG’s plight – saying the Commission is solely responsible for the Electricity Company of Ghana’s (ECG) potential bankruptcy status.

The Commission has condemned this as unfounded and misleading. In a media release, PURC clarified that the issue of ECG’s financial crisis was first raised by ECG itself in a letter dated August 26, 2024 and addressed to the Minister of Finance.

Following this, in its statutory role, PURC communicated the matter’s seriousness to the Energy Ministry and Presidency on September 16, 2024 – recommending measures to address ECG’s financial woes.

Therefore, its internal communication to government was based on ECG’s direct appeal for support.

To date, ECG has not provided the detailed financial data requested by PURC to substantiate its claims of imminent bankruptcy, the PURC release notes.

This notwithstanding, the Commission has advised on strategic interventions aimed at stabilising ECG’s financial position to protect the wider energy sector.

Additionally, the Commission notes that ECG’s involvement in fuel procurement is outside its core mandate of electricity distribution – and reiterated its position that ECG should focus on addressing inefficiencies in its core business.

ECG has consistently failed to comply with the revised Cash Waterfall Mechanism (CWM) guidelines as directed by the President in 2023, which are designed to ensure fair and transparent revenue allocation across the energy sector.

Indeed, ECG’s failure to meet collection benchmarks – particularly the 98 percent revenue collection target – has been a significant contributor to the company’s financial troubles.

PURC reaffirms its commitment to balancing the interests of consumers and utility providers, while collaborating with stakeholders to ensure long-term sustainability for Ghana’s energy sector.

The unhealthy tango between the PURC and ECG is not doing consumers of electric power any good.  What’s needed are interventions which address ECG’s financial woes and ensure power stability. The boardroom wrangling does not need to reach the public sphere.

The post Editorial: Strategic interventions required in energy sector appeared first on The Business & Financial Times.

Read Full Story