The Northern Electricity Distribution Company (NEDCo) faces a significant funding deficit of over GHS 5 billion. This shortfall severely impacts its operational capabilities, according to staff groups from both NEDCo and the Volta River Authority (VRA).
This critical financial gap has emerged because NEDCo's actual operational expenditures far exceeded the tariff revenues approved by the Public Utilities Regulatory Commission (PURC). Over three years, from 2023 to 2025, NEDCo spent more than GHS 7.1 billion. However, the PURC approved only a cumulative GHS 1.64 billion in tariff revenue for this period.
This persistent under-funding is a major factor in Ghana's broader energy sector challenges. The financial strain on state-owned utilities like NEDCo and the Electricity Company of Ghana (ECG) has been a long-standing drain on public resources. These entities frequently report losses, highlighting systemic issues in cost recovery and operational efficiency within the power distribution network.
The local unions of VRA and NEDCo stated that this under-funding through inadequate revenue approval causes the company's operational problems. They argue this situation does not warrant private participation in managing the utility provider. An executive of the staff union, who preferred to remain anonymous, confirmed the authenticity of a petition sent to the Energy Ministry.
The immediate implication is a continued deterioration of power transmission infrastructure and neglected maintenance across NEDCo's service areas. This covers 64% of Ghana's land mass, including eight regions and parts of three others. The debate over private sector participation (PSP) in Ghana's electricity distribution will intensify. Government plans to introduce PSP for improved service and resilience face strong resistance from staff. This echoes past controversies, such as the unresolved issues surrounding the Power Distribution Services (PDS) arrangement.
In 2023, NEDCo's expenditure reached nearly GHS 1.99 billion. The PURC, however, approved only GHS 553 million in tariff revenue for that year. NEDCo's actual revenue for 2023 was approximately GHS 1.7 billion, still well below its spending.
Similarly, for 2024 and 2025, the PURC approved GHS 547 million and GHS 542 million in tariff revenue, respectively. Actual revenues were GHS 1.9 billion and GHS 2.5 billion for these years. Yet, these figures remained significantly lower than the GHS 2.4 billion and GHS 2.7 billion in expenditures incurred during 2024 and 2025.
These figures demonstrate that NEDCo consistently funds its operations from sources other than tariff revenue. Its parent company, VRA, often cannot fully recover the cost of power supplied to NEDCo. The staff unions insist these financial constraints are not due to management deficiencies but rather inadequate funding from approved tariffs. They argue this negates the need for private sector involvement.
The government's guiding framework for private sector participation, rolled out in December 2025, aims to strengthen electricity service. This aligns with measures touted after Ghana's exit from the 17th International Monetary Fund (IMF) program. Investors and decision-makers will closely watch how the government addresses this funding crisis and the resistance to its PSP plans.