The Minister for Energy, John Jinapor, has disclosed that the government has signed a performance contract with the management of the Electricity Company of Ghana (ECG), as part of a comprehensive strategy to tackle inefficiencies and reduce the country’s staggering GH¢67 billion energy sector debt.
Speaking on the floor of Parliament on Wednesday, June 4, Mr Jinapor stated that the government is committed to holding ECG management accountable for poor performance and operational losses.
The agreement also covers district managers and general managers of the various ECG operation areas.
“ECG management will also sign performance agreements with the Ministry of Energy so that we can monitor performance throughout the period.”
He stated that the key to addressing the debt is boosting revenue collection and reducing system losses, which are the two critical areas where ECG has under-performed in recent years.
“When we were leaving office, the losses were around 22 per cent. On assumption of office, it had hit almost 40 per cent. I’m happy to announce that the losses are reducing,” the Minister stated.
The Energy Minister noted that the debt, which currently stands at GH¢67 billion, has been partly moderated due to the recent stability in the exchange rate. However, he stated that the scale of the problem remains significant, requiring multiple interventions.
Mr Jinapor noted that the Ministry will enforce strict implementation of the Cash Waterfall Mechanism, aimed at ensuring fair and transparent distribution of energy sector revenues.
He also hinted at renewed talks with Independent Power Producers (IPPs), suggesting the government would seek concessions to help ease financial pressure on the state.
“We are going to renegotiate with the IPPs again because we believe that they’ve made a lot from the state and this is the time for the IPPs to also show some commitment so we can sustain this sector,” he said.
The Energy Minister continued, “We are working to involve the private sector in the billing and collection at the last mile with ECG and possibly NEDCo so that they can bring expertise, they can bring the needed revenue, and overall efficiency when it comes to collections. Mr. Speaker, these are some of the measures we are taking in collaboration with the Ministry of Finance to work around this inherited debt of 67 billion.”
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