Ghana is reintroducing private sector participation in its electricity distribution system with a new multiple-lease model, signaling a major structural reform aimed at improving operational efficiency, cutting system losses, and attracting fresh capital into the power sector.
According to the 2025 Mid-Year Budget Review presented to Parliament by finance minister Dr Casiel Ato Forson, a steering committee has already been constituted to implement Cabinet’s decision on the new model. A transaction advisor will be procured by the third quarter of 2025 to guide the selection of qualified private entities to manage distribution zones.
The move follows earlier failed attempts, including the termination of a concession agreement with Power Distribution Services (PDS) in 2019, which derailed private sector involvement in Ghana’s distribution landscape.
“Government is committed to the re-introduction of Private Sector Participation in electricity distribution,” the report stated, adding that the new framework will decentralize distribution services under multiple leaseholders rather than a single nationwide concession.
Ghana’s Electricity Company of Ghana (ECG) has long faced challenges with commercial and technical losses, estimated in double digits, while revenue shortfalls have contributed to a persistent cashflow gap across the power value chain.
The new multiple-lease structure is expected to:
- Split the ECG’s distribution areas into separate zones for private management
- Encourage performance-based contracts to drive accountability
- Attract investment in digital metering and loss-reduction technologies
As part of parallel interventions, the government is also helping ECG roll out a major revenue improvement program. Tenders have been launched for the supply of one million smart meters to boost billing accuracy and reduce commercial losses under the Energy Sector Recovery Programme.
Meanwhile, the Ministry of Energy has finalized renegotiation terms with three Independent Power Producers,Twin City Limited, Cenpower Generation, and Early Power to restructure Power Purchase Agreements and legacy debt.
Ghana’s power sector reform is closely watched by energy investors and multilateral partners, particularly under the IMF’s Extended Credit Facility program, which lists energy cost rationalization as a key structural benchmark.
If successful, the model could provide a regional precedent for sustainable private-public distribution partnerships.
