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Julie Kozack, the Director of Communications at the International Monetary Fund (IMF), has backed the Electricity Company of Ghana’s (ECG) proposed 225% tariff hike.
The IMF’s Director of Communications described the proposed utility tariff adjustments as vital to fixing inefficiencies and attracting investment.
Speaking to journalists in Washington, D.C., on Thursday, September 11, 2025, Julie Kozack, explained, “What is essential from our perspective is that any tariff adjustments in the electricity sector aim to address longstanding inefficiencies in the sector, importantly, that they support much-needed investment in the electricity sector, and also that they are aimed at preventing the accumulation of arrears in the energy sector”.
“More generally, we are continuing to support broader sector reforms, including private sector participation in ECG operations,” she noted.
The IMF’s comments come following the Electricity Company of Ghana (ECG )’s proposed 224 per cent tariff hike.
The Electricity Company of Ghana (ECG) has proposed a 225% increase in its Distribution Service Charge for the 2025 to 2029 tariff period.
The power distribution company is seeking an adjustment from the current GHp19.0875/kWh to an average of GHp61.8028/kWh to restore the company’s financial stability.
Their proposal notes the rising inflation, foreign exchange volatility, and interest rates.
According to ECG projections, its annual revenue requirements are rising steadily, averaging GHS 9.1 billion across the five years.
ECG’s significant tariff review has been necessitated as they expect its operational costs, human resource expenses, depreciation, capital recovery payments, and tax obligations will continue to climb.
The power distribution company, according to reports, is also recommending a wide-ranging set of reforms to the tariff structure, which include the following,
“Collapse of tariff bands to two categories for residential customers and one for non-residential users, aimed at simplifying billing. Elimination of cross-subsidisation to ensure equitable allocation of costs and non-discriminatory tariffs.
Net Metering Tariff Structure for customers with grid-connected renewable energy, in line with the government’s renewable energy policy. Adoption of the Bank of Ghana exchange rate for tariff determination to cushion against forex volatility.
Service charge allocation exclusively to ECG for meter maintenance and replacement. Introduction of a public lighting tariff to resolve funding shortfalls for street lighting.
Full recovery of investment costs for completed and ongoing projects. Inclusion of liquid fuel costs during plant shutdowns in the Weighted Average Cost of Fuel (WACOF).
Factoring in the full reserve margin cost of 18 per cent into tariffs. Monthly automatic tariff adjustments instead of the current quarterly system”, the recommendations added.
ECG proposes a 225% increase in its Distribution Service Charge for the 2025 to 2029 tariff period if approved by the Public Utilities Regulatory Commission (PURC), which would mark one of the steepest adjustments in Ghana’s electricity pricing history, putting more burden on Ghanaian households.
Meanwhile, Solomon Owusu, a leading member of the Movement for Change, has tackled the Electricity Company of Ghana (ECG) after it proposed a 225% upward adjustment in the Distribution Service.
According to Solomon Owusu, the ECG must first retrieve stolen state funds under previous managers before it thinks of proposing a 225% tariff increase.
Speaking on TV3 New Day’s, The Big Issue, September 10, 2025, Solomon Owusu, stated, “ECG, before they think of any increment or proposal to increase tariff, they must first of all go for all those that have stolen from us. Retrieve or recover stolen assets and wealth for the state. And I tell you if they are able to do that, they will rather be reducing tariffs”.
“Hitherto, they were telling us that an increment had become necessary because of exchange rate, inflation and technical losses. Fortunately, the exchange rate has stabilised, inflation is now at 11.5% so practically ECG has no justification for increasing.
“I am told that 450,000 out of the 2.5 million meters that they have are not connected. What it means is that they are unable to collect revenue from these 450,000 meters because of connectivity,” he stressed.
Solomon Owusu pleaded with the PURC to reject the ECG’s proposed tariff.
He added, “I will be very surprised to see the PURC admit this proposal into action. You remember the PURC reduced tariffs in 2024 because it was an election year; clearly, they were doing politics with our energy needs.
“So if you have reduced tariffs in 2024 when the Cedi was depreciating, you cannot come and say in 2025 (increased tariff) when, as a matter of fact, the Cedi has stabilised and inflation is doing well”.