In response to swirling rumors, Energy Minister John Jinapor has firmly dismissed claims that the government is planning to sell the Electricity Company of Ghana (ECG), assuring the public that while full privatization is off the table, there are plans to introduce private sector participation to enhance efficiency and financial sustainability.
“The news items, the publication, and the commentary by some people who should know better that we are selling ECG, it’s not true; it will not be sold,” Jinapor emphasized during a working visit to the West African Gas Pipeline Company Station in Tema
The minister acknowledged the mounting financial challenges plaguing the ECG and the broader energy sector, underlining the need for private sector expertise to streamline operations, reduce losses, and boost revenue collection.
The conversation around private sector involvement in ECG inevitably recalls the failed Power Distribution Services (PDS) concession in 2019. The government handed over ECG operations to PDS under a 20-year concession, but the deal was terminated after just seven months over concerns about fraudulent insurance guarantees.
The fallout from the PDS saga left a sour taste in the mouths of many Ghanaians, fueling skepticism about any future private sector partnerships.
This time around, Jinapor assures that the government is focused on creating a more transparent and accountable model for private sector participation, one that will avoid the pitfalls of the PDS debacle.
Ghana’s energy sector is grappling with inefficiencies and mounting debts, forcing the government to redirect funds from critical development projects to settle arrears with energy suppliers like N-Gas and WAPCo.
“The Minister of Finance should not be using taxpayers’ money, which could have been allocated to roads, hospitals, or other infrastructure, to pay WAPCo. But today, we have to squeeze and take money from the budget to pay N-Gas $75 million,” Jinapor lamented
This financial strain underscores why the government is exploring private sector participation as a tool to improve operational efficiency within ECG, reduce technical and financial losses that have plagued the utility for years, enhance revenue collection to ensure ECG can meet its financial obligations without relying on government bailouts.
Potential areas for private sector involvement include operational management contracts, thus bringing in global energy firms to improve efficiency without transferring ownership. Public-Private Partnerships (PPPs) to finance critical infrastructure upgrades, such as smart grids and modern metering systems and revenue collection enhancements ie leveraging private sector expertise to reduce non-technical losses and improve bill payment rates.
Ghana’s energy sector is at a tipping point. Without significant reforms, ECG’s financial instability could lead to frequent power outages due to unpaid debts to power producers. It could also worsen the country’s fiscal deficit, as more public funds are used to bail out the sector as well as discourage foreign investment in Ghana’s broader energy and infrastructure projects.
But with the right reforms, including carefully managed private sector involvement, ECG could become a financially sustainable utility, delivering reliable power while freeing up government funds for other development priorities.
While Jinapor’s assurances have temporarily calmed fears of a full-scale privatization, the success of this plan hinges on the government’s ability to design transparent, effective partnerships that balance profitability with public service obligations.
