Energy Economist Ebenezer Baiden has defended the Electricity Company of Ghana’s (ECG) proposal for a 225% tariff increase, stressing that the company’s current revenue share is too small to sustain its operations.
Speaking on Joy FM’s Super Morning Show, Mr. Baiden explained that ECG only retains 11% of electricity revenue, while between 65–70% goes to power generation, and another share to the transmission company GRIDCo.
“Standard utility operations should keep about 30–35% of revenue, but ECG is working with just 11%. At that level, it is simply collecting revenue and paying it all out without covering its own costs,” he stated.
Multi-year tariff review
Mr. Baiden noted that the request falls under the Public Utilities Regulatory Commission’s (PURC) multi-year tariff review cycle, which happens every five years. Ghana is currently transitioning from the 2022–2025 cycle into the next phase (2026–2030), where structural and financing issues are assessed.
According to him, ECG has been forced to pre-finance projects before tariff adjustments can be approved, leaving the company heavily indebted.
“Currently, you have to finance projects, bring them into service, and demonstrate their impact before PURC allows a tariff adjustment. So we’ve relied on supplier credits, bank loans, and facilities. Our books are now in the red,” Mr. Baiden revealed.
Investments and digitalisation
Despite the financial strain, ECG has expanded its network from Techiman to the south, serving over 75% of Ghana’s electricity demand. This includes transformer injections to resolve low voltage issues and digitalisation efforts to improve customer service.
“Today, you can buy credit, pay bills, and report faults from your room. Technical teams respond without you visiting district offices. These improvements came at a cost, and now ECG must recover those investments,” he stressed.
The financial breakdown
Mr. Baiden illustrated the gap between cost and recovery.
“If power purchase costs 10 cedis, transmission adds 1 cedi, and ECG’s operations cost 2 cedis, the total is 13 cedis. But ECG charges customers around 8 cedis. Even paying power producers puts us in debt,” he explained.
For this reason, ECG has submitted its proposal to PURC, urging for a “stretch adjustment” to rebase its revenue share and secure financial stability.
