IES Calls On Government To Strengthen VRA, ECG And NEDCO Rather Than Dismantle Them

Nana Amoasi VII – Executive Director – Institute for Energy Security (IES)

By: Justice Appiah                                                                                             

09-08-24

The Institute of Energy Security is calling on government to focus on stabilizing and strengthening the Volta River Authority (VRA), Bui Power Authority, Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) rather than taking them apart.

This follows a draft bill merging the Volta River Authority with Bui Power Authority, combining the Electricity Company of Ghana with Northern Electricity Distribution Company (NEDCo) and the establishment of an independent Thermal Power Authority.

In a press statement issued and signed by the Executive Director of IES, Nana Amoasi on Sunday September 8, 2024, he urged government to reconsider the bill and work towards solutions that preserve Ghana’s energy security, affordability, and long-term sustainability.

According to Nana Amoasi, while the proposed merger and restructuring of Ghana’s power sector may have its proponents, he believes that the risks far outweigh the benefits in its current form.

He urged government to conduct extensive engagement with all relevant stakeholders, including VRA staff, and industry experts, to ensure that the proposed changes are thoroughly vetted and understood by all parties.

Nana Amoasi noted that transparent dialogue is essential to avoid potential pitfalls that could harm the sector, but rather ensure that the best interests of the nation are prioritized.

He stressed that VRA should retain control over its thermal power plants, adding that these plants are crucial to VRA’s financial health and their removal would severely compromise the authority’s operational sustainability.

Touching on the huge debt bedeviling the sector, the Executive Director of IES, said government must urgently resolve the outstanding debt issues between VRA, ECG, and VALCO.

Mr. Amoasi further indicated that failure of these entities to meet their payment obligations has created a severe liquidity crisis for VRA, which must be corrected before any structural changes are made.

He asked for a thorough impact assessment to be conducted on the cost implications of merging VRA’s hydro assets with Bui Power Authority and any move that risks increasing electricity tariffs must be reconsidered in light of the economic challenges facing Ghanaians.

Nana Amoasi said, it is crucial to address the sector debt before creating any new energy authorities since government is currently owing independent power producers (IPPs) to a tune of over US$2 billion,

“The IPPs play a crucial role in maintaining power supply, and any shutdown threats due to non-payment could severely affect the reliability of Ghana’s electricity supply,” he noted.

He underscored the importance for competition and innovation in the distribution sector hence the need to allow the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) to operate independently for purposes of quality service delivery.

September 9, 2024

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