Power generation: Be ready to pay more for tariffs with private participation – Expert
The Executive Director of the Kumasi Institute of Technology, Energy and Environment (KITE) has hinted of a possibility of Ghanaians paying more to have reliable, sustainable power.
This he suggested will come as a result of the introduction of private individuals and organisations in the production and distribution of power in the country.
Ishmael Edjekumhene pointed to the heavy expenditure required to finance and manage power generation and distribution companies in the country like ECG and GRIDCO saying that the amount runs in billions of dollars the government doesn’t have to spend.
To make up for the extra cost needed to ensure full operation of these entities, he explained requires the partnership with private firms who he was quick to admit will run to make profits.
The Executive Director asserted that just like in any sector, private entities engaged to assist in the production and distribution of Ghana’s energy mix will not want to incur losses and so will sell at competitive economic prices that may be higher than that of the State-run companies.
He thus urged the public to psych themselves to pay more should there be private players in the process.
“When you talk about Energy it is broad. If it is Petroleum sector we need a lot of money, if it’s electricity even before the private sector participation in ECG, the projection showed that we need about $5 billion to be able to be able to improve upon the distribution network. GRIDCO has it’s own long-term plans as well, they need a lot of billions of dollars so we need a lot of money that the public sector cannot provide. So the private sector is inevitable, we need the right mix for us to attract private capital. Our taxes cannot fund the investments we need” he disclosed.
KITE Executive Director observed, “If it is the private sector, it is not coming in as Father Christmas and that is something that we all need to understand. The private sector comes in, it means that you have to pay more of what is economic tariffs. It means that tariffs may be able to go up otherwise government will have to subsidise. If government decides to subsidise and don’t give the money to the utility then we pile up debts”
He chastised political figures for politicising energy sector issues and hiding the facts from the public and charged them to open up even after realising they have misinformed the public.
“Our unwillingness to pay more taxes or go for more loans according to him is a stumbling block to the generation of more revenue to address the issues by government and basis for private sector involvement.”
“There are no free lunches and that is what sometimes we find difficult to explain because of what the politician themselves said before they came to power. In this country, we don’t want to pay more taxes, we don’t want the government to also borrow and when they are getting too close to the Chinese we are uncomfortable. So how is the government to raise money? And I am not talking about this administration. Every government will need to fund infrastructure and run the country. And everywhere it is either taxes, or you borrow or you get a grant. So there is no easy way out” he observed.
Ishmael Edjekumhene was speaking on the sidelines of a programme themed “Joint Seminar on Energy Securities in Africa: Identifying the challenges and Addressing the Priorities” organised by IMANI and OCP Policy Center in Accra.
Panelists at the event charged government to assess the possibility of exploiting renewable resources to enrich Ghana’s energy mix and make it more affordable and accessible to all.
They stressed that it was unacceptable for Ghana and the continent as a whole to have unreliable power.