ASEC opposes proposed merger of VRA, BPA, ECG, and NEDCo

The Africa Sustainable Energy Centre (ASEC) has expressed strong opposition to a recent bill before Parliament proposing the merger of the Volta River Authority (VRA) and Bui Power Authority (BPA), as well as the consolidation of the Electricity Company of Ghana (ECG) and Northern Electricity Distribution Company (NEDCo). The bill also seeks to establish an independent Thermal Power Authority. Staff groups from the VRA have publicly criticized the restructuring, while ASEC outlined several reasons for its opposition.

ASEC argues that merging these entities poses significant economic risks, especially given VRA’s role in shielding Ghanaians from electricity price hikes. The Centre warns that privatizing the state’s thermal assets could lead to price exploitation by Independent Power Producers (IPPs), potentially causing sharp electricity price increases for consumers.

ASEC highlights VRA’s profitability, including a GHS 156 million profit in 2020, as evidence of its effective management. It argues that privatisation should only be considered when a public entity underperforms, which is not the case with the VRA. Removing thermal assets from VRA’s portfolio would compromise its ability to ensure reliable energy supply, as thermal energy helps stabilize VRA’s revenue streams.

The Centre also warns that merging VRA and BPA could stifle innovation and competition, particularly in renewable energy efforts. Additionally, merging ECG and NEDCo, both of which face significant financial losses, is seen as an ill-advised move that would further strain the electricity distribution sector.

ASEC calls for transparency and consultation, urging that the independence of VRA and BPA be preserved to safeguard Ghana’s renewable energy progress. The Centre believes the proposed restructuring threatens VRA’s financial stability and could undermine years of progress in the energy sector.