The shareholding threshold of Ghanaians in the ECG Private Sector Participation (PSP) Programme has been increased from 20 percent to 51 percent in response to public concerns over the issue.
Delivering the 2018 Budget Statement and Economic Policy to Parliament, on Wednesday, the Finance Minister, Mr Ken Ofori-Atta, said the Government also sought the amendment to reduce the concession period from 25 years to 20 years.
According to the Millennium Development Authority, The PSP would be in the form of a Concession, during which the electric distribution network and other assets of ECG would be leased to the Concessionaire, while ECG becomes an Asset holding Company.
At the end of the Concession, all assets would be transferred back to ECG.
MiDA says the successful implementation of this activity would ensure reliable power supply for domestic and industrial use; Lower cost of services resulting in relatively stable end–user tariffs; Improved transparency and independence in the setting of regulated tariffs by the Public Utility Regulatory Commission.
It says over the medium term, improvements in ECG’s creditworthiness would enable the Company acquire additional generation capacity from IPPs without, or with limited, recourse to government guarantees.
The Finance Minister said to enhance development of a competitive power market, the Government approved the restructuring of Volta River Authority (VRA) to include an entity to manage the hydroelectric facilities separately and the sale to the private sector of the state-funded thermal power plants, which government assigned to VRA to manage and operate.
“The restructuring of VRA will also enable the use of cheap electricity from legacy hydro to support government subsidy objectives to a targeted category of consumers in a transparent manner,” he said.
Another reforms in the Energy Sector to begin next year, the Minster said, an MDA Solar Rooftop Programme dubbed: ‘Government Goes Solar’, to reduce the expenditure on utilities.
The initiative is also in line with the Ministry of Energy’s policy of increasing the penetration of renewable energy in the energy mix and the promotion of distributed solar power for government and public buildings.