The Minister of Energy, Boakye Agyarko, yesterday laid in parliament a concession agreement for ratification that will allow private sector participation in the operations of the Electricity Company of Ghana (ECG).
Private partners led by Manila Electric Company (Meralco) have been selected for the private sector participation in ECG in line with the terms of the Second Millennium Challenge Compact as agreed upon by the previous John Mahama-led National Democratic Congress administration in August, 2014.
Briefing journalists about the agreement after laying it in parliament yesterday, Mr Agyarko said the private partners are expected to invest a minimum of $580 million to bail the company from huge operational losses it has been suffering.
The Minister said the management account of ECG in 2017 posted a loss of over GH¢767 million before tax while its liabilities stood at GH¢7.6 billion with current assets standing at GH¢5 billion meaning a net loss of over GH¢ 2billion.
He said the previous NDC government agreed to privatise the ECG because of the continuous losses that ECG was making and to mobilise private capital to be injected into the operations of the company in order to improve the quality of service, efficiency and finances of the company to support the achievement of middle-income status and also to minimize additional financial burden on government.
He said the New Patriotic Party (NPP) after taking over reins of power in January and inheriting the Second Millennium Challenge Compact from the NDC for the privatization of ECG took a critical look at the available options of a lease, management contract, partial or full privatization and concession for the privatisation.
He said the NPP opted for the concession and suggested much better terms that will inure to the benefit of Ghanaians and the nation at large.
He said under the new deal, Ghanaians will have 51% shares in the company as against 20% agreed upon by the previous regime while the concession will last for 20 years instead of the 25 years previously agreed upon by the NDC.
He mentioned the Ghanaian shareholders as TG Energy Solutions which owns 560,000 shares of the company’s two million shares representing 28%, Santa Baron Ventures who owns 260,000 shares representing 13% and GTS Engineering Ltd owning 200,000 shares representing 10% making up the 51%
He mentioned the foreign shareholders as Manila Electric Philippino owning 600,000 making 30% and Anergia SA Angola owning 380,000 making up 19%.
He said the private partners will help invest in the distribution of power and help improve the financial and operational turnover of the company and have therefore agreed to use the name Power Distribution Services (Ghana) Limited for their operations.
He said despite the private participation, ECG remains the property of the state and that the government will continue to appoint the managing director of the company.
He allayed the fears of Ghanaians by saying that the private participation will not affect pricing of electricity which will still be done by the Public Utilities Regulatory Commission (PURC) under its pricing system.
He said electricity supply will rather be improved and pricing also made very competitive and affordable.
The Minister also assured workers of ECG that they will not be affected by the new partnership and that all ECG workers will be maintained.
He, however, said those who think that the new arrangement will not benefit them still have the collective bargaining power to negotiate for their severance packages and entitlements.
He said after the ratification of the agreement by parliament, the new partners will fully start business on August 2.