Financial Analyst, Sydney Casely-Hayford has opined that it would be worthwhile for Ghana if every region had its own independent power producer.
According to him, this move will reduce the load on the current managers of the country’s electricity distribution chain and open the economy up for more investment.
He explained that producers can be selected for the regions after a bidding process.
Mr. Casely-Hayford made the suggestion on Citi FM’s news analysis programme, The Big Issue on the back of the privatization of the Electricity Company of Ghana.
Compact II and ECG
Government had announced that it is seeking an amendment to the Power Compact II which seeks to allow private participation in the affairs of ECG.
Under the agreement, which is known as the Power Compact II, government is expected to allow about 80 percent private sector control in ECG for the country to benefit from a cash injection of about one billion US dollars over a period of 5 years.
But speaking to Ghanaian workers at the celebration of May Day in Accra last Monday, President Nana Akufo-Addo maintained that government wants about 51% stake for Ghanaians instead.
Meanwhile, speaking on The Big Issue, Casely-Hayford was of the view that the Compact agreement would not have been necessary if his suggestion is adopted.
“It makes a lot of logical sense to me that we should have independent power producers who are given the opportunity to sell into the regions.” He explained that the regions could be demarcated into seven with the three regions of the north being one and “sold off to people during a bidding session.”
“What I would do is to combine GRIDCo back to VRA, and get VRA to provide the energy and the distribution and give the independent power producer one single tariff. It doesn’t mean you are breaking GRIDCo up or turning it on the loose; you are just putting it back on the VRA so you could have a single tariff. When you have that then the independent power producers can then buy their power to allow for even distribution throughout the whole sector.”
Mr. Casely-Hayford further explained that the regions could be structured in a way to make them attractive to the potential power producers.
“They can then find their own sources [of power] going forward and then you also allow them the opportunity to build their own power stations. So you give them a long term offer — 20 to 30 years. And if somebody thinks he can build a two or three megawatt power station that will supply his whole region so he is not dependent on buying power from the main power producer, he should have the opportunity to do so. That is what brings value into an economy. That is what really kicks private sector in and going,” he added.
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