Introduction

Ghana’s power sector is entering a pivotal phase. In a recent strategic retreat, the country’s Energy Minister, Dr. John Abdulai Jinapor, announced that electricity transmission and distribution companies will be subjected to stricter efficiency scrutiny starting in 2026. The declaration targets two of the nation’s biggest distributors – the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) – and signals a decisive shift toward greater accountability, financial sustainability and customer‑centric service. This article unpacks the announcement, explains the technical and regulatory backdrop, analyses the likely impact on the grid, and offers concrete advice for stakeholders who must adapt to the new regime.

Key Points

Background

Overview of Ghana’s Power Sector

Ghana’s electricity system comprises three main segments: generation (dominated by hydro‑, solar‑ and thermal plants), transmission (operated by the Transmission Company of Ghana (TCG)), and distribution (managed by a handful of utilities, the most prominent being ECG and NEDCo). The sector has historically grappled with high aggregate technical losses – the World Bank estimated them at approximately 16 % of total electricity supplied in its 2023 report – and uneven service quality across urban and rural areas.

Historical Performance of ECG and NEDCo

ECG, responsible for power delivery to the Greater Accra Region and parts of the south, has consistently reported distribution losses hovering around 9‑10 %. NEDCo, serving the northern belt, experiences similar challenges, with loss figures often exceeding 12 %. Both companies have also faced criticism for delayed bill payments, low meter‑reading accuracy and limited customer engagement.

These performance gaps have been amplified by a surge in electricity demand driven by industrial expansion, the 24‑hour economy policy and a growing middle class. Projections from the Ministry of Energy indicate that national demand could rise by 3‑4 % annually over the next decade, underscoring the urgency of improving transmission and distribution efficiency.

Analysis

Transmission Constraints

Dr. Jinapor highlighted transmission as “an important vulnerable link” that must be reinforced to evacuate power from generation sites and deliver it reliably across the country. The current transmission network, operated by TCG, suffers from ageing infrastructure and limited inter‑regional capacity. Upgrades slated for completion by 2026 include the addition of 150 kV lines in the Ashanti and Eastern regions and the deployment of advanced congestion‑management tools.

Distribution Losses

Distribution losses are primarily technical (due to aging conductors, inadequate protection settings) and commercial (theft, meter mis‑reading, billing errors). The minister’s directive calls for a minimum 30 % reduction in aggregate technical losses by 2026, a target that aligns with the Energy Efficiency Master Plan released by the Energy Commission in 2022.

Regulatory Framework

Ghana’s electricity sector operates under the Electricity Act, 1997 (Act 541), which empowers the Energy Commission and PURC to set performance standards and impose sanctions for non‑compliance. Recent amendments to the act reinforce the regulator’s authority to levy fines, suspend licences, or mandate corrective action plans when utilities fail to meet stipulated benchmarks. Legal scholars note that these provisions create a clear pathway for enforceable accountability, making the 2026 scrutiny more than a symbolic gesture.

Practical Advice

For Utilities

ECG and NEDCo should adopt a three‑pronged approach:

1. Data‑driven loss auditing – Deploy advanced metering infrastructure (AMI) and real‑time monitoring to pinpoint loss hotspots.
2. Targeted network upgrades – Prioritise replacement of high‑resistance conductors and installation of automatic reclosers in areas with chronic outages.
3. Customer‑centric reforms – Expand self‑service portals, reduce bill‑payment cycles and train front‑line staff on service excellence.

Implementing these steps will not only improve benchmark scores but also enhance revenue collection, creating a virtuous cycle of financial sustainability.

For Policymakers

Ministerial and regulatory bodies must ensure that the benchmarking methodology is transparent, evidence‑based and periodically reviewed. They should also provide incentives – such as low‑interest financing for efficiency projects – to offset the capital intensity of network upgrades. Finally, a clear grievance redress mechanism should be established to address customer complaints promptly.

For Consumers

Households and businesses can contribute by adopting energy‑saving practices, reporting irregularities in billing, and participating in demand‑response programmes where available. Informed consumers are a critical lever for reducing commercial losses and reinforcing the utility’s focus on service quality.

Frequently Asked Questions

What does “more difficult scrutiny” mean for ECG and NEDCo?

It means that the utilities will be evaluated against concrete, publicly disclosed performance targets. Failure to meet these targets will trigger regulatory enforcement actions, including fines and mandated corrective plans.

How will efficiency be measured?

Efficiency will be assessed using four key metrics – loss reduction, billing potency, network mobilisation speed, and service delivery quality – each with predefined quantitative thresholds for the 2026 reporting year.

What are the penalties for non‑compliance?

Under the amended Electricity Act, non‑compliance can result in monetary penalties, suspension of operating licences for specific segments, or compulsory implementation of an approved efficiency improvement plan. The exact sanction will be determined by the PURC after a formal investigation.

Is there a timeline for full implementation?

The scrutiny begins in 2026, but utilities are expected to start aligning their internal processes immediately. A phased rollout of benchmark reporting will commence in 2025, allowing companies to demonstrate progress before the enforcement phase.

How does this initiative relate to Ghana’s renewable energy goals?

Improved transmission and distribution efficiency is essential for integrating variable renewable sources such as solar and wind. By reducing technical losses, more generated renewable energy can be delivered to consumers, supporting the nation’s ambition to achieve 10 % renewable penetration by 2030.

Conclusion

The Energy Minister’s announcement marks a decisive step toward a more resilient, efficient and customer‑focused electricity sector in Ghana. By subjecting ECG and NEDCo to rigorous 2026 scrutiny, the government aims to close the gap between current performance and the demands of a rapidly expanding economy. Success will depend on coordinated action: utilities must embrace data‑driven loss reduction and service reforms; regulators must provide clear benchmarks and enforceable consequences; and consumers must remain vigilant participants in the nation’s energy ecosystem. If these elements align, Ghana can expect a more reliable power supply, lower operational costs, and a stronger foundation for future renewable energy integration.