Don’t collapse ECG, don’t sell ECG – John Jinapor explains major reforms at ECG

Minister for Energy and Green Transition, John Jinapor, has announced reforms for the Electricity Company of Ghana (ECG). These changes aim to improve financial discipline and operational efficiency amid challenges in the energy sector.

In an interview with Citi FM, Mr. Jinapor shared his actions to streamline ECG’s finances. He has closed multiple accounts held by the company.

“I’ve closed all of ECG’s accounts except for one holding account,” he said. This account has been transferred to GCB, a state bank.

This decision aims to enhance transparency and track funds properly. Mr. Jinapor noted that past financial mismanagement led to borrowing through overdrafts to pay Independent Power Producers (IPPs).

“What ECG used to do was take overdrafts weekly,” he explained. “By month-end, these overdrafts accrue a lot of interest.”

He also mentioned concerns from stakeholders about ECG's compliance with the cash waterfall mechanism. This framework ensures fair revenue distribution within the electricity value chain.

“You heard complaints from IPPs and PURC about ECG not adhering,” he stated.

To resolve these issues, a new arrangement is in place for timely payments. “We’ve told the IPPs to be patient,” he assured. “On the 27th of each month, the cash waterfall committee will meet for disbursements.”

While discussing reforms, Mr. Jinapor clarified that he does not support selling ECG. Instead, he advocates for private sector involvement in billing and revenue collection.

“We think private sector participation is key,” he emphasized. “Don’t collapse or sell ECG.”