ECG vows to undertake reforms

BY Daniel NONOR, Accra

The newly appointed board of the Electricity Company of Ghana (ECG) has pledged to pursue a series of reforms aimed at turning around the fortunes of the power distributor.

This commitment was made clear by the Board just a day after the resignation of the Managing Director (MD), Samuel Dubik Mahama which prompted the board to convene an emergency meeting to address the leadership changes and outline their plans for the future.

Speaking to the media,yesterday the Board Chairman Afenyo Markin  acknowledged the resignation of the MD but emphasized that this development would not affect the company’s ability to deliver essential power services to its consumers.

He assured the public that measures have been put in place to ensure seamless operations, despite the shift in leadership.

“We received the resignation of the Managing Director and immediately convened an emergency meeting. The board has since accepted the resignation, and Mr. David Asamoah has been nominated to act as Managing Director in the interim. The final decision on this matter rests with the government, but we will have the necessary engagement with all stakeholders,” the Board Chairman stated.

He stressed that the company’s system remains robust and operational and that the management team is fully supportive of the board’s decisions.

 “There will be no interruption in the power supply as a result of this change in management. The system is in place, and ECG will continue to provide essential services to both individual and corporate clients,” he assured.

While the resignation of the MD might signal internal Baird room challenges, the Board maintained that it remains focused on its mandate to improve the company’s performance through critical reforms.

 The Chairman acknowledged that the power distributor is facing several challenges, which include financial and technical hurdles, but that the new board was fully committed to tackling these issues head-on.

“We have challenges, both technical and financial, but our key focus now is to implement the necessary reforms to make ECG a more viable entity. This is not just a management issue but an all-inclusive matter, and we are determined to approach it from a reform-driven perspective,” he said.

 The  Board  appealed for continued support from the government to help navigate the company’s financial difficulties. While specifics were not disclosed, the Chairman hinted that “very soon, the company will make some matters public,” which could likely refer to broader structural or financial announcements in the coming weeks.

The Chairman reiterated that ECG’s goal is to become a more efficient and effective utility provider, acknowledging that reforms would be the driving force behind this transformation.

He emphasized the importance of teamwork and collective responsibility in achieving these objectives, saying,

“We accept that we must hold ourselves accountable and carry these reforms forward. It is an all-inclusive effort, and we are ready to shoulder the responsibility.”

This press conference also marked the first formal meeting of the new ECG board, which has been tasked with overseeing the company’s transition to a more stable and reformed organization.

 According to the Chairman, the Board members are determined to uphold their duties and ensure that ECG becomes an efficient entity capable of delivering consistent and reliable power services.

The company’s plea for government support comes at a time when ECG is grappling with significant financial constraints, which have reportedly affected its ability to deliver optimal services.

The Public Utilities Regulatory Commission (PURC) a few weeks ago  served notice that the Electricity Company of Ghana  may be on the verge of bankruptcy due to severe financial difficulties.

In a letter addressed to the Presidency, the Energy and Finance Ministers, and other key stakeholders, PURC highlighted the crisis that is also impacting the operations of the Volta River Authority (VRA), Ghana Grid Company (GRIDCo), and the Bui Power Authority.

According to the regulator,  these challenges have led to delays in salary payments and difficulties in covering administrative costs, underscoring the urgency for immediate action.

The letter from PURC notes that for June and July 2024, ECG declared revenues of GHS 884.2 million and GHS 857 million, respectively, which were insufficient to cover the monthly $47 million Tier A plus WAPCo’s bill under the Cash Waterfall Mechanism.

The situation worsened in August 2024, with ECG’s revenue falling below GHS 800 million, representing about 42% of the expected revenue needed to pay sector players. A report from PURC on ECG’s compliance with the Cash Waterfall Mechanism also indicated about GHS 860 million shortfall in payment to Independent power producers.