The Ministry of Energy and Green Transition has introduced a comprehensive Private Sector Participation (PSP) framework for Ghana’s electricity distribution sector, marking a major step towards improving service delivery, operational efficiency and long-term sustainability. The framework is designed to strengthen electricity distribution while safeguarding public ownership of core assets and enhancing customer satisfaction nationwide.
What the PSP Framework Seeks to Achieve
The guiding framework establishes a clear structure for private sector involvement in electricity distribution while maintaining regulatory oversight.
Key objectives include:
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Reducing technical and commercial losses
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Improving efficiency and service quality
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Attracting private investment
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Strengthening revenue collection
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Enhancing customer satisfaction
The framework defines the roles and responsibilities of the Technical Advisor, the PSP Implementation Unit, ECG, NEDCo and relevant regulatory institutions.
How the Private Sector Participation Model Will Work
Under the PSP model, government will adopt a multiple-lease structure, allowing private operators to manage electricity distribution zones without owning the assets.
Key features of the model include:
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Private operators lease and operate distribution zones
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Assets remain publicly owned by ECG, NEDCo and the Government of Ghana
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Operators manage the full power delivery chain from bulk supply points to customers
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Accountability for both technical and commercial performance
Distribution Zones, Tariffs and Payments
According to the framework:
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Concession zones will combine ECG and NEDCo areas for balance
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Consumer electricity tariffs will remain uniform nationwide
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Wholesale tariffs will vary by zone to ensure fair operator profitability
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Operators will be paid through a performance-based remuneration system, including:
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Fixed service payments
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Incentives and penalties tied to efficiency, service quality and loss reduction
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Quotes and Official Remarks
Speaking through the Chief Director of the Ministry, Solomon Adjetey-Sowah, the Minister for Energy and Green Transition, John Abu Jinapor, stated:
“The main goal of the PSP framework is to improve electricity distribution by reducing losses, improving efficiency and service quality, attracting investment and ensuring better customer satisfaction.”
He added:
“The PSP Framework is not designed to privatise our utilities but to enhance performance, build resilience and unlock the full potential of the distribution sector.”
Regulatory and Social Safeguards
The framework places strong emphasis on:
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Transparency and accountability
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Protection of social policies and lifeline customers
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Uniform nationwide tariffs
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Clear public lighting responsibilities
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Labour and contractor transition arrangements
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Strong performance monitoring mechanisms
Existing licences held by ECG and NEDCo will be reissued to PSP operators under regulatory supervision.
Future Outlook for Ghana’s Power Distribution Sector
The government envisions:
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Significantly reduced system losses
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Stronger revenue collection
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Modern, technology-driven customer service
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Timely and sustainable network upgrades
Development partners, including the World Bank, IFC, USAID and AfDB, provided technical and analytical support during the framework’s development.
Stakeholder Engagement and Next Steps
Chairman of the PSP Committee, Jabesh Amissah-Arthur, said the number of private operators had not yet been finalised and would be determined in consultation with the appointed Technical Advisor.
He emphasised nationwide stakeholder engagement, noting:
“We are going to have engagement all over the country for people to bring their comments so that any necessary amendments can be incorporated.”
FAQs: Private Sector Participation in Electricity Distribution
Does the PSP framework privatise ECG or NEDCo?
No. All core electricity assets remain publicly owned.
Will electricity tariffs increase?
No. Consumer tariffs will remain uniform nationwide.
Who regulates the PSP operators?
The Energy Commission and other relevant regulatory bodies will maintain oversight.
