Balanced reforms needed for ECG private sector participation

The Institute for Energy Security (IES) has called for constructive engagement and carefully balanced reforms in government’s proposed Private Sector Participation (PSP) in the operations of the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo).

In a press statement issued on January 13, 2026, IES said it had closely reviewed recent public discussions, labour actions and official communications following the release of the Ministry of Energy and Green Transition’s PSP Guiding Framework, as well as protests by the Public Utilities Workers Union (PUWU) and statements from the Trades Union Congress (TUC).

IES acknowledged and respected the concerns raised by organised labour, particularly on job security, transparency, national interest and the long-term implications of private involvement in strategic national assets.

The institute noted labour’s position that recent operational improvements within ECG show that many inefficiencies stem from governance failures, political interference, unfavourable contractual arrangements and systemic weaknesses across the power value chain rather than worker performance.

However, IES stressed that ECG’s financial and operational challenges remain significant and cannot be ignored. According to the institute, persistent revenue leakages, high technical and commercial losses and mounting sector debt estimated at over US$1.5 billion continue to pose serious risks to Ghana’s energy security, fiscal stability and broader economic performance.

It further noted that ECG and government still owe Independent Power Producers close to US$725 million, with an additional US$460 million owed to the Ghana Grid Company, underscoring the depth of the sector’s financial distress.

IES maintained that government is justified in principle in exploring private sector participation as a reform tool, particularly where it is narrowly targeted at revenue mobilisation, metering, loss reduction and operational efficiency.

It cautioned, however, that PSP is not a cure-all and that poorly designed or rushed implementation could repeat past setbacks and deepen public mistrust.

The institute therefore called for an urgent shift from confrontation to constructive engagement between government and organised labour. It proposed the establishment of a structured, time-bound tripartite social dialogue platform involving the Ministry of Energy and Green Transition, organised labour, regulators and independent experts to jointly address concerns and co-design reform pathways.

IES also recommended a phased and conditional approach to PSP, beginning with pilot interventions in areas such as revenue collection and metering, and scaling up only after independently verified performance results.

It further called for clear labour and social safeguards, including job protection, skills transfer, local participation and respect for labour rights, to be embedded in all PSP agreements.

On transparency and accountability, IES urged government to publish key diagnostic studies, financial assumptions and core PSP contract principles, while strengthening oversight by the Public Utilities Regulatory Commission (PURC) and Parliament. It also emphasised the need for parallel structural reforms to depoliticise ECG’s governance and improve accountability across the entire energy value chain.

While acknowledging government’s efforts to develop a more structured and evidence-based PSP framework, including stakeholder consultations and international benchmarking, IES cautioned that technical soundness without broad social consensus remains politically fragile and could undermine implementation.

In conclusion, IES said the future of ECG and Ghana’s electricity distribution sector is a shared national responsibility that requires inclusive dialogue, pragmatic compromise and a firm commitment to protecting the public interest while restoring financial and operational viability.