The government has intensified moves to offer on concession for private sector participation (PSP) in the management of, operation of and investment in the electrical distribution business of the Electricity Company of Ghana (ECG).
The term of the concession period is 25 years subject to compliance with the terms of the concession agreement by the concessionaire.
Mr John Jinapor, the Deputy Minister for Power, speaking at a Roadshow for PSP Transaction in ECG on Monday, lauded the Millennium Development Authority (MiDA) for putting the event together and reiterated government’s commitment to the PSP in ECG Transaction.
“Government’s objective for the PSP in ECG is to have a technically and financially sound ECG, which is key to making Ghana’s power sector a vital engine of the country’s development,” he said.
“I urge everyone present here to take advantage of the networking opportunity provided here to deliberate on ways to collaborate and take advantage of the opportunities that the project presents particularly with regards to local content,” he said.
Mr Jinapor said government would not renege on its responsibility to take the right and appropriate decision that would propel the economy forward.
“Ultimately, it is the wellbeing and long term benefit of Ghanaians that government is interested in and that is what has precipitated the decision to have private participation in ECG,” the Deputy Minister said.
The ECG PSP activity is one of the activities in the ECG Financial and Operational Turnaround Project within the Ghana Compact Two Programme.
The compact has the overall goal to reduce poverty through economic development and provides a United States Government grant of $ 498.2 million.
ECG is one of the largest power distribution utilities in Sub-Saharan Africa with over three million registered customers and over 6,000 Gigawatt Hour (GWh) of electricity sold per annum.
Its service area covers approximately 36 per cent of Ghana‘s territory and accounts for 18.12 million people (73.5 per cent), of which 57.6 per cent live in urban areas.
Mr Owura Sarfo, Chief Executive Officer of MiDA, expressed his pleasure that so many of the invited guests honoured the request to attend the Roadshow.
“I see today’s event as part of the process to positively transform Ghana’s Power Sector,” he said.
He said the Roadshow was to provide more information on the transaction and to give prospective investors an opportunity to meet other investors, form strong alliances and to also facilitate the promotion of local content requirement in the PSP transaction.
Mr Robert Dwamena, the Managing Director of the ECG, assured that the ECG PSP transaction, would transform ECG in terms of technology and efficiency in power distribution.
“ECG can become a strong company under this transaction, and Ghana’s power generation system will also benefit from the improvement of power distribution,” he said.
He said ECG requires significant investments of not less than $ 200 million per year to address its investment gap in order to meet the annual power demand growth rate of about 10 per cent.
Mr Dwamena said under ECG PSP Transaction agreement, assets would still be 100 per cent owned by the state; while the electricity market would still be regulated by the Public Utility Regulatory Commission.
Mr Julius Kpekpena, the Chief Operating Officer, MiDA, said a request to pre-qualify (RfQ) for the PSP in ECG, which was advertised earlier in both local and international media seeks to spell out the criteria to qualify companies that had expressed interest in the bid.
He said so far 62 international corporate entities had expressed interest in the PSP in ECG.
He said the deadline for the submission of tender for the concession by prospective bidders is Tuesday, May 3 and the winner would be announced on Wednesday, November 9.