A member of the Ghana Institution of Engineering, electrical engineer Hesford Quaye-Larbi, has identified financial weakness as a major challenge confronting Ghana’s power sector, attributing it partly to persistent electricity losses.

According to him, distribution companies are struggling to recover revenue from a significant portion of the electricity supplied to consumers because of technical and commercial losses within the distribution system.

Speaking on Joy FM’s Super Morning Show on Tuesday, September 1, Mr Quaye-Larbi said current system losses stood at about 27%.

“As we speak, the loss is about 27%,” he stated.

He explained that when distribution companies receive electricity for sale but lose a significant portion of it before revenue can be recovered, their ability to meet financial obligations is weakened.

Using a simple illustration, Mr Quaye-Larbi said if a company received 100 units of electricity but lost 27 units, it could only generate revenue from the remaining 73 units.

“So it means you haven't made a profit. It losses,” he said.

He said the revenue shortfall creates a wider financial burden across the power sector, as distribution companies are still required to meet payment obligations to independent power producers and other electricity suppliers.

The financial difficulties could also affect government revenue, he added, as financially weak state-owned institutions may struggle to meet their tax obligations.

Mr Quaye-Larbi therefore called for greater focus on reducing electricity losses and improving revenue collection as part of efforts to restore financial stability to the sector.

He argued that reducing the current level of losses could generate significant additional resources for the sector without necessarily relying immediately on higher electricity tariffs.

“The 27%, if we're able to collect it, I can't figure out the total amount. It's a prevalent amount. But it will do a lot,” he said.

He also called for investment in transmission and distribution infrastructure to reduce technical losses and improve the efficiency of electricity delivery.