[{"bbox": [83, 105, 1145, 159], "category": "Text", "text": "outages, which Ghanaians called 'dumsor' (off-on in twi), have affected millions of individuals and businesses, and\nthis has severely hampered the country's economic and social development."}, {"bbox": [83, 184, 1147, 319], "category": "Text", "text": "Ghana has become a net exporter of electricity through the regional electricity interconnection project funder under the Western Africa Power Pool (WAPP.). Currently, Ghana exports about 715 GWh to Benin (to the Communauté Électrique du Bénin – CEB) and, about 577 GWh to Burkina Faso (to the Société Nationale d'électricité du Burkina Faso - SONABEL). In total, 208 GWh were exchanged between Ghana and Côte d'Ivoire, representing 58 GWh of imports and 149 GWh of exports. Ghana's total exports reached 1,441 GWh in 2020."}, {"bbox": [83, 344, 1146, 452], "category": "Text", "text": "Therefore, while Ghana covers its electricity production needs, regular outages due to the poor quality of electricity infrastructure are a systematic issue. The country has set itself the goal of achieving universal access to electricity by 2025 and a 10% share of renewable energy in its electricity production by 2030, which is Ghana's National Determined Contribution's target."}, {"bbox": [83, 476, 1145, 558], "category": "Text", "text": "Following the lockdown imposed to contain the Covid-19 pandemic and the slowdown in the economy, the Ghanaian government covered half of the electricity bills from April to September 2020 for residential and commercial users; this support was complete for the most financially vulnerable users."}, {"bbox": [83, 583, 496, 609], "category": "Section-header", "text": "## Regulation of electricity tariffs is ill-suited"}, {"bbox": [83, 610, 1147, 767], "category": "Text", "text": "In this context, the government and the regulator PURC (Public Utilities Regulatory Commission) has faced the challenge of reconciling social acceptance of tariffs and cost recovery of electricity companies, and have attempted in recent years to adopt a more transparent approach to tariffs. Since 2011, PURC has only partially applied its tariff revision methodology, which theoretically aims to recover the costs of market participants, according to an “Automatic Adjustment Formula”, which was supposed to take into account the cost of fuel supply and the exchange rate."}, {"bbox": [83, 795, 506, 820], "category": "Section-header", "text": "## An indebted sector with a structural deficit"}, {"bbox": [83, 821, 1145, 955], "category": "Text", "text": "As a result of the supply crisis and more structural challenges, the energy sector's deficit has gradually widened to USD 850 million per year. Indeed, in parallel with a tariff structure that does not allow the recovery of operators' costs, the revenues received by the incumbent distributor, the Electricity Company of Ghana (ECG)⁶, are far from offsetting the increase in production costs following the injection of new expensive thermal power plants (especially powered by heavy fuel oil)."}, {"bbox": [83, 980, 1146, 1141], "category": "Text", "text": "Moreover, the insufficient uptake of financial flows from ECGs to other players in the sector (GRIDCo, VRA, BPA) and the purchase of fuels exposed to the price increase of petroleum products led to an estimated stock of cross-debt of USD 2.8 billion in 2020. For this reason, the government has committed to cleaning up the energy sector, through measures aimed at addressing the financial crisis and adopting more structural reforms. In 2021, in an effort to settle these debts, the government paid GHS 2.63 billion to ECG, on behalf of all ministries, departments, agencies, which were not equipped with meters or not paying their bills."}, {"bbox": [83, 1166, 355, 1193], "category": "Section-header", "text": "## The electricity sector actors"}, {"bbox": [83, 1193, 1146, 1300], "category": "Text", "text": "Ghana is one of the first countries in Sub-Saharan Africa to have created a competitive electricity market, by unbundling in the 2000s electricity activities between production, transmission and distribution. Transparency International ranks Ghana 73rd out of 180. The government has a strong anti-corruption legal framework in place but faces challenges in its enforcement⁷."}, {"bbox": [83, 1325, 1145, 1379], "category": "Text", "text": "The regulation of the sector is shared between the Energy Commission (technical regulator that grants the licences) and the PURC (financial regulator in charge of establishing the tariff schedule)."}, {"bbox": [83, 1404, 456, 1432], "category": "Text", "text": "Production is based on 3 types of actors:"}, {"bbox": [120, 1431, 1145, 1484], "category": "List-item", "text": "i) Volta River Authority (VRA): public company and historical operator of the sector, with 2 hydro plants - Akosombo dam (1020 MW) and the Kpong dam (160 MW) - 6 thermal plants and 2 solar plants."}, {"bbox": [120, 1484, 1145, 1564], "category": "List-item", "text": "ii) Bui Power Authority (BPA): jointly financed by a Chinese loan and equity from the Ghanaian government, it has been managing the operation of the Bui hydroelectric plant (400 MW) since December 2013. BPA also manages the Tsatsadu micro generation station, and has been commissioned to build and"}, {"bbox": [72, 1622, 1040, 1648], "category": "Footnote", "text": "⁶ The ECG has failed to collect revenues (no history of bill payments by government departments and governments)."}, {"bbox": [72, 1646, 434, 1672], "category": "Footnote", "text": "⁷ https://www.transparency.org/en/cpi/2021"}, {"bbox": [1051, 1671, 1158, 1696], "category": "Page-footer", "text": "Page 5 of 22"}]