ECG pushes for 224% tariff hike to stabilise operations

The Electricity Company of Ghana (ECG) has proposed an average 224 percent increase in its Distribution Service Charge (DSC1) for the 2025–2029 tariff period, in what would be one of the steepest adjustments in Ghana’s electricity pricing history.

According to the company, the review—from the current GHp19.0875/kWh to GHp61.8028/kWh—is necessary to restore its financial viability and ensure sustainable operations.

“The adjustment … is critical to restoring the company’s financial viability and ensuring sustainable operations,” ECG stated in its proposal, citing inflation, exchange rate volatility, interest rates, and the recovery of investment costs as key drivers.

ECG projects its annual revenue requirement will average GHS 9.1 billion over the next five years, driven by rising operational costs, human resource expenses, depreciation, capital recovery, and tax obligations.

Proposed reforms

Beyond the headline tariff increase, ECG is recommending major changes to the tariff structure, including:

Reducing tariff bands to two categories for residential users and one for non-residential customers.
Eliminating cross-subsidisation to ensure fair allocation of costs.
Introducing a Net Metering Tariff Structure for grid-connected renewable energy users.
Applying the Bank of Ghana exchange rate for tariff determination.
Allocating service charges exclusively to ECG for meter maintenance and replacement.
Creating a dedicated public lighting tariff to address streetlight funding shortfalls.
Factoring in full recovery of investment costs and an 18 percent reserve margin.
Moving from quarterly to monthly automatic tariff adjustments.

Energy outlook

On procurement, ECG projects to source 22,784 GWh from the Volta River Authority and Independent Power Producers in 2025, transmitting 21,478 GWh after system losses. It expects system losses, currently at 27.68 percent, to reduce by one percent each year.

Bulk generation costs are forecast to rise from 253.78 GHp/kWh in 2025 to 302.73 GHp/kWh in 2029, and up to 359.09 GHp/kWh with reserve margins included.

The proposal, if approved by the Public Utilities Regulatory Commission (PURC), would significantly reshape Ghana’s electricity pricing framework—a move ECG insists is essential to safeguard power reliability and attract future investment.

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