Six companies have been shortlisted for the Private Sector Participation (PSP) role in the electricity distribution business of the Electricity Company of Ghana (ECG).
This follows interest shown by 83 entities, out of which 11 entities submitted their applications for pre-qualification and six entities have been shortlisted
Chief Executive Officer of MiDA Ing. Owura Safo speaking at a Bidders Conference held in Accra said: “It is our expectation that bids would be received by October 2017 and a Concession agreement signed with the selected Concessionaire by March 2018.
That way the ECG PSP transaction can reach financial close by early September 2018 so the Concessionaire can commence in earnest the management, operation, and investments in ECG by October 2018.
To enable us achieve this timeline, we will require the corporation of all stakeholders.”
He added that: “The ECG Financial and Operational Turnaround Project aims to strengthen the governance and management of ECG by bringing in an acceptable concessionaire to make investment designed to reduce technical, commercial, and collection losses and improve service quality.
MiDA continues to work together with all stakeholders on this journey of identifying the best qualified private sector partner for ECG.
This partnership will transform the ECG in terms of technology in power distribution. Let us seize the opportunity together to improve the power situation in our dear country,” he added.
ECG Concession not sale
Mr. Boakye Agyarko, Minister of Energy said putting the largest electricity distributor under private care is not a sale and that government will still own the assets of the ECG.
“I wish to restate the fact that government is not privatizing the ECG. Government will still own the assets of ECG while they are managed and operated by the concessionaire.
We are seeking the best qualified private sector partner, with the financial capacity and the right experience to partner ECG. We expect that the engagement will transfer capacity to ECG staff for sustainable management of the utility,” Mr. Agyarko told over 100 participants at the first Bidders Conference on the concessions for the Private Sector Participation (PSP) in the electricity distribution business of the ECG held in Accra.
He explained that the country’s major energy-distribution body will have its assets rather leased for 20 years under the Compact.
He indicated that the successful bidder should indeed be able to help us revitalize the power sector, this will enable “our industries to become more productive, so as to grow our economy and provide more jobs for Ghanaians.”
He added: “The requirement for the Concessionaire to manage, operate and carry out investments in Electricity Company of Ghana (ECG) in during the term of the concession remains a key objective for power compact.”
Mr. Agyarko said: “We are confident that your interest in this bid process is because you are also committed to our aspirations for the company.”
He indicated that there is no argument that an improved and efficiently managed power sector is key to unlocking the development potential of our dear country, adding that years of inadequate investment, inefficiencies within the utility, and a large stock of outstanding receivables, particularly in the distribution sector, have all conspire to make the organisations in the energy sector what they are today.
Available figures show that ECG is one the largest power distribution utilities in Sub-Saharan Africa with over 3million registered customers and over 6,000 GWh of electricity sold per annum.
While ECG’s service area covers approximately 36 percent of country’s territory, it services 18.12 million people, 57. 6% of which live in urban areas.
The Board Chair of MiDA, Professor Yaa Ntiamoa-Baidu said the Bidders’ Conference was a major step towards meeting the objectives of the Compact 11 Programme.
She added that: “Since the new Board was formed, we have been building on all the work that has been done so far, including work on the process of identifying qualified private sector partners for ECG through a transparent and competitive process.”