- Ghana Public Utilities Regulatory Commission has raised concerns about the Electricity Company of Ghana’s impending insolvency.
- The Commission acknowledges that ECG has initiated and started implementing digital and metering programmes to improve its cash collection.
Ghana Public Utilities Regulatory Commission (PURC) has raised concerns about the Electricity Company of Ghana’s impending insolvency. According to the PURC, the electricity distribution company’s ongoing financial problems must be addressed.
“The Commission has noted the persistent financial challenges facing the Electricity Company of Ghana (ECG) is a matter of grave concern not only for ECG but for the entire energy sector. These challenges are contained in the letters submitted by ECG, highlighting the imminent risk of bankruptcy,” the utility regulatory body wrote in a letter to the Ministry of Energy dated September 16.
The PURC said, “Given ECG’s strategic role in power distribution, its financial instability poses a significant threat to the sector’s sustainability and the security of electricity supply, which could lead to a national security threat.
The Commission acknowledges that ECG has initiated and started implementing digital and metering programmes to improve its cash collection. However, despite these efforts and the Commission’s decision to increase tariffs by more than 75 per cent since September 2022, ECG’s financial difficulties persist. Indeed, for June and July 2024, ECG declared GHS 884,200.000.00 and GHS 857,000.000.00, respectively. These amounts were insufficient to pay the Tier A plus WAPCo’s bill of $47 million per month.
The letter signed by the Executive Director of the PURC, Dr Ishmael Ackah, noted, “Unfortunately, in August 2024, ECG declared less than GHS 800 million. This represents about 42 per cent of the revenue expected by the Commission to be collected and paid to the sector players.
The Tier B companies include Ghana Gas. VRA, GRIDCo, ECG, Bui and the regulators are struggling to get enough to pay staff and administrative costs. This situation underscores the need for deeper introspection and structural changes beyond tariff adjustments.”