Government needs $4bn to solve energy crisis

Ghana's energy crisis will be over if government can fund it with $4 billion, the Technical Working Group set up by government has said.

The astronomical figure will permanently erase the cyclical crisis that has plagued the country for decades, the group said, adding that a bonus benefit of solving the power crisis was that it will naturally help solve another perennial utility problem - water.

A technical committee was set up by President John Dramani Mahama in reaction to strong public opposition to "steep" increase in electricity and water tariffs by 78% and 52% respectively.

The Committee was composed of representatives from Ghana Employers Association, Association of Ghana Industries and Private Enterprise Federation as well as the Utility Companies including Volta River Authority, Electricity Company of Ghana, Ghana Grid Company Limited and Bui Power Authority, Public Utilities Regulatory Commission among others.

It was to examine "possible scenarios and their implications for the sustainable and efficient provision of utility services and the respective impact on the national budget".

It finished and presented its interim report on Thursday, October 24. It said there was a huge gap between the amount of power produced currently and what is needed to efficiently drive economic growth.

The committee says government alone could not raise this money alone and will need private investment from independent power producers.

Private power producers would need a tariff regime that is attractive and a 50% increase in tariff was not acceptable, the committee noted, stressing that Government would have to consider a tariff regime that sends the right signals for private investment in the energy sector.

State of power production in Ghana

The state-owned Volta River Authority (VRA) is involved in power generation in the country. It owns and operates the Akosombo Hydro Power Station, Kpong Hydro Power Station and the Takoradi Thermal Power Plant (TAPCO) situated at Aboadze.

VRA is also a minority joint partner with TAQA, a private sector company, which owns and operates the Takoradi International Power Company (TICO) thermal plant, also located at Aboadze.

Bui Power Authority, another state-owned agency, is implementing the Bui Hydroelectric Power Project, while a number of private Independent Power Producers (IPPs) projects have been licensed and are at various stages of development.