Utility providers in Ghana have submitted proposals to the Public Utilities Regulatory Commission (PURC) asking for upward review of their tariffs from July this year.
The Ghana Grid Company Limited (GRIDCo) on its part is also seeking an upward adjustment of its tariff.
“The objective underpinning this Tariff Proposal is to obtain a cost-reflective tariff that will enable GRIDCo 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 the proposal.
Speaking to Asaase Radio’s Gemma Appiah on Monday (9 May), the manager at the executive office of the Ghana Grid Company Limited, Bernard Gyan said the company needs more funds to implement necessary investments to meet the demands of Ghanaians.
“The tariff is a proposal that we sent to PURC and it is in line with our work. 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. And 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 [and] we need to meet that demand then we can have some investment. And that’s why we’re [GRIDCo] asking for a new tariff increment,” he 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 investments in the NITS to meet the growing electricity demand.
The company added that the non-cost reflective tariff also makes the required return on most planned investments lower than the cost of financing, thereby making it unattractive to investors.