NEDCo reels under GH¢5bn funding deficit – VRA, NEDCo staff claim
The Northern Electricity Distribution Company (NEDCo), which supplies power to 64 per cent of the country's land mass, is facing operational vulnerability due to a funding deficit of more than GH¢5 billion.
This is because while the Public Utilities Regulatory Commission (PURC) approved a cumulative GH₵1.64 billion in tariff revenue for NEDCo over three years — 2023, 2024 and 2025 — the power distribution company actually expended over GH₵7.1 billion over the specific period.
The difference between approved tariff revenue and actual expenditure over the past three years has left the company that distributes power to at least eight regions and parts of three other regions with huge power supply challenges in the northern parts of the country, according to the Volta River Authority (VRA) and NEDCo Staff groups.
The huge funding deficit has left power transmission infrastructure critically challenged, while maintenance issues remain outstanding, the staff groups told the Daily Graphic in an exclusive interview.
The local unions of VRA and NEDCo said the under-funding through inadequate revenue approval was responsible for the company’s operational challenges and therefore did not need any private participation in the management of the utility provider.
For instance, they stressed that NEDCo’s nearly GH₵1.99 billion expenditure in 2023 far outstripped the GH₵553 million tariff revenue target approved by the PURC for that year, with the company recording about GH₵1.7 billion in actual revenue for that year.
Similarly, while the PURC approved GH₵547 million and about GH₵542 million in tariff revenue for 2024 and 2025, respectively, the actual revenues amounted to GH₵1.9 billion and GH₵2.5 billion, which were still far below the GH₵2.4 billion and GH₵2.7 billion expenditure incurred for 2024 and 2025, respectively.
This is because while the Public Utilities Regulatory Commission (PURC) approved a cumulative GH₵1.64 billion in tariff revenue for NEDCo over three years — 2023, 2024 and 2025 — the power distribution company actually expended over GH₵7.1 billion over the specific period.
The difference between approved tariff revenue and actual expenditure over the past three years has left the company that distributes power to at least eight regions and parts of three other regions with huge power supply challenges in the northern parts of the country, according to the Volta River Authority (VRA) and NEDCo Staff groups.
The huge funding deficit has left power transmission infrastructure critically challenged, while maintenance issues remain outstanding, the staff groups told the Daily Graphic in an exclusive interview.
The local unions of VRA and NEDCo said the under-funding through inadequate revenue approval was responsible for the company’s operational challenges and therefore did not need any private participation in the management of the utility provider.
For instance, they stressed that NEDCo’s nearly GH₵1.99 billion expenditure in 2023 far outstripped the GH₵553 million tariff revenue target approved by the PURC for that year, with the company recording about GH₵1.7 billion in actual revenue for that year.
Similarly, while the PURC approved GH₵547 million and about GH₵542 million in tariff revenue for 2024 and 2025, respectively, the actual revenues amounted to GH₵1.9 billion and GH₵2.5 billion, which were still far below the GH₵2.4 billion and GH₵2.7 billion expenditure incurred for 2024 and 2025, respectively.
Petition
Portions of a petition objecting to the invitation of the private sector into the operations of NEDCo addressed to the Energy Ministry, the VRA/NEDCo Staff Groups referenced “a persistent and structural inadequacy in the PURC-approved revenue requirement to support NEDCo’s operations over the period 2023–2025”.
An executive of the staff union, who confirmed the authenticity of the petition document, pleaded anonymity, however.
“This assessment is anchored on key regulatory and operational benchmarks, namely a distribution loss target of 21.4 per cent, a revenue collection efficiency of 98 per cent, and full cost recovery (100 per cent margin),” the document said.
It argued that even when NEDCo’s performance was aligned with those benchmarks, the resulting margins remained insufficient, relative to both the approved revenue requirement and the actual revenue needed to sustain operations.
“In 2023, a revenue shortfall of GH¢106.43 million would still have been recorded under optimal performance conditions,” it added.
The petition said similarly that, in 2024, a deficit of almost GH¢13 million would have been incurred despite improved operational efficiency, and that it was only in the third and fourth quarters of 2025 that NEDCo would have generated marginal surpluses, assuming full compliance with the regulatory benchmarks had been achieved.
The labour unions said the PURC-approved revenue framework was not cost-reflective and remained inadequate to meet NEDCo’s operational requirements.
“Even under optimal efficiency conditions, significant revenue gaps persist, highlighting a fundamental mismatch between approved revenues and the true cost of service delivery.
“This sustained under-recovery has significantly constrained NEDCo’s ability to invest in critical infrastructure, enhance operational efficiency, and deliver reliable and sustainable electricity services,” the groups stated.
