Ghana Grid Company Ltd says the request for a tariff increment is to allow it to invest in the sector and meet Ghana’s energy demands.
Utility providers in Ghana have submitted proposals to the Public Utilities Regulatory Commission (PURC) asking for an upward review of their tariffs, starting in July this year.
Ghana Grid Company Ltd (GRIDCo), for its part, is seeking a sharp upward adjustment of its charges for electricity.
“The objective underpinning this tariff proposal is to obtain a cost-reflective tariff that will enable GRIDCo [to] improve the service levels and quality thresholds, and importantly enhance the company’s sustainability. It has become increasingly expensive to maintain the legacy assets and upgrade the transmission infrastructure to reduce congestions within the National Interconnected Transmission System (NITS),” GRIDCo said in its submission.
Speaking to Asaase Radio’s Gemma Appiah on Monday (9 May 2022), the manager in the executive office of GRIDCo, Bernard Gyan, said the company needs more funds to carry out much-needed investments in order to meet the demands of Ghanaians.
“The tariff is a proposal that we sent to PURC and it is in line with our work,” Gyan said.
“In our work, most of the inputs are at forex. All the inputs that we use for this construction and maintenance of our transmission lines, they’re forex and you know that the exchange rate has also changed quite a bit. Also, we need to expand the network to meet the increasing demand of Ghanaians,” he said.
“Ghanaians are becoming sophisticated; they’re becoming aware, and they don’t want to hear ‘outage’. We need to meet that demand, then we can have some investment. And that’s why we’re [GRIDCo is] asking for a new tariff increment,” Gyan added.
Increasing cost of transmission financing
In its tariff proposal, GRIDco said the absence of a cost-reflective tariff has hampered GRIDCo’s capacity to secure direct loans for medium- to long-term investment in the NITS to meet the growing demand for electricity.
The company added that the non-cost-reflective tariff also makes the return on most planned investment lower than the cost of financing, thereby making it unattractive to investors.
