By Evans Worlanyo Ameamu
Keta (VR) Jan. 31, GNA – Dr Elikplim Kwabla Apetorgbor, the Chief Executive Officer (CEO) of Independent Power Producers (IPPs), has advised the Public Utility Regulatory Commission (PURC) to mount a strategy to optimise electricity tariff to sustain the power sector.
He said the policy proposal would present an actionable strategy for reforming electricity tariff determination in Ghana, to ensure the financial independence of the Electricity Company of Ghana and long-term sustainability of the power sector.
Dr Apetorgbor, in an interview with the Ghana News Agency, on the issues of power crisis and sustainability, recommended that the removal of Value Added Tax (VAT), indexing tariffs to exchange rates, enforcing operational efficiency, and optimising natural gas utilisation among others should be welcomed.
“The power sector faces several challenges, and we must ensure affordable electricity for consumers while maintaining financial sustainability across the value chain,” he stated.
He said the ECG’s inability to meet its financial obligations to generators, transmission companies and suppliers, was due to non-cost reflection tariff approved by the PURC, high operational inefficiencies and energy losses.
He said exposure to current depreciation without mitigation mechanisms and unfavourable fiscal policies like VAT on electricity and supplies to ECG should be addressed, saying, the proposal was aimed to improved financial stability across the electricity supply values chain.
“The cumulative impact of these challenges threatens the sustainability of Ghana’s power sector. Experiences from countries like Nigeria, where poor tariff structure led to the collapse of privatised utilities and Kenya which achieved substantial reductions in losses through operational reforms ought to be learnt,” he said.
Dr Apetorgbor also proposed that Ghana’s surplus generation capacity should be monetised through regional exports and provide an additional revenue in foreign current to export electricity through the West African Power Pool (WAPP).
He said the partnership with WAPP would expand regional trade and upgrade transmission infrastructure to facilitate cross-border electricity flow to strengthen bilateral agreements with neighboring countries.
He said that “increase foreign exchange revenue for the electricity sector and reduced reliance on domestic consumers for revenue generation would further create a stronger economic bond nearby countries.”
Dr Apetorgbor said the proposal recommended critical policy interventions to ensure the financial independence and sustainability of Ghana’s electricity sector and PURC’s leadership
should implement the measures to drive long-term benefits for all stakeholders from domestic consumers as well as international investors.
GNA