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Presentation Outline
!   Purpose of Presentation
!   Executive Summary
!   NEDCo Profile
!   NEDCo Challenges
!   Objectives & Strategies
!   Conclusion
3
Purpose of Presentation
!   To introduce NEDCo to Donors
!   To begin a dialogue and seek their support on
how NEDCo can become a self sustaining
commercial operation in the next five years
4
Executive Summary (I)
!
NEDCo has grown substantially since its inception as the Northern Electricity
Department (NED) in 1987
!   Customer growth: 19x; CAGR 13% (1990-2011)
!   Energy growth: 8.6x; CAGR 7%
!   Billed Revenue growth: 2,083x; CAGR 38%
!
NEDCo is today an unprofitable entity because the majority of its customers
do not pay commercially viable tariffs
!
NEDCo’s distribution system has been historically under-invested in and not
capable to properly service the large geographic area it covers
!   Unacceptable quality of supply: Low voltages & frequent interruptions
5
Executive Summary (II)
!
NEDCo’s objective over the next five years is to adequately resource
the organisation to meet the extraordinary challenges it faces
!   Financial: Inadequate tariffs and commercial customers
!   Commercial : High losses
!   Technical: Unreliable and weak infrastructure and delivery systems
!   People & Systems: Well trained with appropriate logistics and IT systems
!
NEDCo’s opportunity and challenge are to serve as a key partner in
Government initiatives to transform the north into a major
agricultural production zone
!
NEDCo’s ability to resource to meet these challenges will ensure a
self-sustaining commercial entity in the long-term
6
Profile- NEDCo
!
NEDCo supplies Electricity in Brong-Ahafo,
Upper East, Upper West and Northern regions
of Ghana and the northern parts of Ashanti and
Volta regions
!
NEDCo also supplies electricity to some border
towns of Burkina Faso and Togo
!
NEDCo operations today cover 64% of the
geographical area of Ghana
!  
Population Access of the Electricity is 36 %
!
NEDCo Distributes 10.2% of total energy
consumed in Ghana
!  
Customer Population was 380,000 at end of
2011
7
Profile- Customer Analysis
!   Customer Population has grown from 20,000 in
1990 to 380,000 in 2011
!   Compounded Average Growth Rate (CAGR) of
number of customers of 13 % per Annum
NEDCo Number of Customers 1990-2011
8400.00
350.00
TOTAL
CAGR 2007-2011:9%
2002-2011:11%
1997-2011:12%
300.00
DOMESTIC
CAGR 2007-2011:9%
2002-2011:10%
1997-2011:12%
1992-2011:13%
1992-2011:13%
250.00
Domestic(000)
Number of
Customers 200.00
(thousands)
Commercial('000)
Industrial'('000)
150.00
Total('000)
100.00
COMMERCIAL
CAGR 2007-2011:10%
2002-2011:12%
1997-2011:12%
1992-2011:13%
50.00
-
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Domestic(000)
19.21 22.03 27.55 39.21 40.20 45.79 51.61 55.77 67.97 84.23 97.15 108.82 118.05 129.40 135.52 170.54 192.67 206.66 231.18 254.39 281.71 312.00
Commercial('000)
5.15
6.07
5.72
8.57
8.45
9.84
Industrial'('000)
0.02
0.01
0.01
0.02
0.02
0.02
Total('000)
11.13 11.78 13.62 16.67 18.10 20.12 21.61 23.05 24.43 32.18 37.43 41.60 47.27 53.45 60.31 68.01
0.02
0.02
0.03
0.02
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.03
0.04
0.04
0.04
0.04
24.38 28.11 33.28 47.79 48.66 55.65 62.76 67.58 81.62 100.93 115.27 128.97 139.68 152.47 159.97 202.76 230.13 248.29 278.48 307.87 342.06 380.05
Year
INDUSTRIAL
CAGR 2007-2011:6%
2002-2011:4%
1997-2011:4%
1992-2011:6%
9
Profile- Energy Growth
!   Energy Consumption grew from 60 GWh in
1990 to 519 GWh in 2011
!   Consumption Pattern
!   Residential Customers ( 82%) : 57 % of Energy
!   Non Residential Customers (17.9 %) : 31.1 % of
Energy
!   SLT Customers (0.01 %) : 11.2 % of Energy
10
NEDCo Billed Energy 1990-2011
600.00
500.00
TOTAL
CAGR 2007-2011:7%
2002-2011:7%
1997-2011:6%
1992-2011:7%
400.00
DOMESTIC
CAGR 2007-2011:6%
2002-2011:5%
1997-2011:5%
1992-2011:7%
Energy
300.00
(GWh)
Domestic('000,000)
Commercial('000,000)
200.00
Industrial('000,000)
COMMERCIAL
CAGR 2007-2011:10%
2002-2011:11%
1997-2011:9%
1992-2011:9%
100.00
Total('000,000)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
INDUSTRIAL
CAGR 2007-2011:4%
2002-2011:6%
1997-2011:5%
Domestic('000,000)
36.6 47.3 80.0 84.2 91.8 95.4 118. 133. 128. 142. 150. 165. 172. 181. 199. 211. 215. 214. 218. 222. 255. 292.
1992-2011:5%
Commercial('000,000)
14.2 18.7 31.0 29.0 32.1 32.1 39.9 43.1 43.4 48.5 48.2 54.1 57.9 59.6 70.3 82.1 89.5 100. 115. 135. 152. 165.
Industrial('000,000)
9.16 13.7 21.1 22.6 23.1 25.7 28.1 29.5 29.0 33.9 33.5 30.3 35.3 42.4 52.6 50.4 51.0 49.9 58.2 53.9 57.5 61.6
Total('000,000)
60.0 79.8 132. 136. 147. 153. 186. 206. 200. 225. 232. 250. 265. 283. 322. 344. 356. 365. 391. 412. 465. 519.
-
Year
11
Profile- Billed Revenue
!   Billed Revenue for NEDCo has grown at a
compounded average growth rate (CAGR) of:
!   28% for 2007 to 2011
!   27% for 2002 to 2011
!   30% for 1997 to 2011 and
!   36% for 1992 to 2011
NEDCo Billed Revenue 1990-2011
140.00
12
120.00
Domestic('000,000)
Commercial('000,000)
Industrial('000,000)
100.00
TOTAL
CAGR 2007-2011:28%
2002-2011:29%
1997-2011:36%
1992-2011:38%
Total('000,000)
80.00
DOMESTIC
CAGR 2007-2011:22%
2002-2011:25%
1997-2011:34%
Cedis
(millions)
1992-2011 :38%
60.00
COMMERCIAL
CAGR 2007-2011: 33%
2002-2011:33%
1997-2011:42%
1992-2011:40%
40.00
INDUSTRIAL
CAGR 2007-2011:28%
2002-2011:27%
1997-2011:30%
1992-2011:36%
20.00
-
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Domestic('000,000)
0.02
0.03
0.07
0.13
0.18
0.29
0.37
0.54
1.85
2.09
2.20
3.85
4.75 12.96 13.24 13.96 14.23 16.40 26.63 26.43 33.91 44.75
Commercial('000,000)
0.03
0.04
0.08
0.11
0.20
0.19
0.23
0.33
1.34
1.45
1.52
2.99
3.66
4.37
8.57
9.79 10.66 15.04 23.43 28.29 49.51 62.79
Industrial('000,000)
0.01
0.01
0.04
0.05
0.10
0.13
0.19
0.37
0.63
0.32
0.74
1.26
1.71
3.01
3.72
4.06
Total('000,000)
0.06
0.08
0.19
0.29
0.47
0.61
0.79
1.24
3.82
3.87
4.46
8.10 10.13 20.34 25.53 27.81 28.93 36.73 59.75 64.33 97.01 125.5
Year
4.04
5.29
9.69
9.61 13.60 17.99
SNAPSHOT OF 2011 CUSTOMER PROFILE
13
Customer
Type
% age of
Total
Customer
Population
% of total
Energy
Consumed
% of Billed
Revenue
Average
Average
Energy
Tariff
Consumed/ (GHS/kWh)
Month
(kWh)
Residential
82.05
57.71
36
85
0.166
NonResidential
17.94
31.07
50
209
0.405
LV
0.01
11.22
14
61,761
0.415
MV
393,756
0.260
HV
319,632
0.227
NEDCo 2011 Number of customers
14
Industrial'('000)
, 0.04 , 0%
Commercial('00
0), 68.01 , 18%
Domestic(000),
312.00 , 82%
Domestic(000)
Commercial('000)
Industrial'('000)
NEDCo 2011 Billed Energy (kWh)
15
61.68 , 12%
Domestic('000,000)
165.17 , 32%
Commercial('000,000)
292.24 , 56%
Industrial('000,000)
NEDCo 2011 Billed Revenue (Million Cedis)
16
17.99 , 14%
44.75 , 36%
Domestic('000,000)
Commercial('000,000)
Industrial('000,000)
62.79 , 50%
17
CUSTOMER NUMBER, BILLED
ENERGY AND BILLED
REVENUE ANALYSIS FOR
SUNYANI AND NORTHERN
AREAS OF NEDCo
Sunyani Area Number of Customers-2011
18
16 , 0%
20,345 , 18%
Domestic
Commercial
Industrial
93,607 , 82%
Sunyani Area Billed Energy(kWh) - 2011
19
29,669,888 ,
18%
39,990,291 ,
24%
98,058,278 ,
58%
Domestic
Commercial
Industrial
Sunyani Area Billed Revenue (Cedis)- 2011
20
8,476,960 , 22%
15,028,227 , 39%
14,991,163 , 39%
Domestic
Industrial
Commercial
Northern Area Number of Customers - 2011
21
4 , 0%
16,747 , 17%
Domestic
Commercial
Industrial
81,323 , 83%
Northern Area Billed Energy - 2011
22
23,440,844 ,
15%
70,803,112 ,
47%
56,866,160 ,
38%
Domestic
Commercial
Industrial
Northern Area Billed Revenue - 2011
23
6,161,486 ,
15%
11,440,688 ,
29%
22,386,700 ,
56%
Domestic
Commercial
Industrial
24
NEDCo’s 5-Year Performance : 2007-2011 Year 2007 2008 2009 2010 2011 Energy Purchased (GWH) 494 529 566 643.82 728.57 Energy Sales (GWH) 365 392 404 517.74 581.11 Energy Loss (GWH) 129 137 162 126.08 147.45 26.11 % 25.90 28.62% 19.58 % 20.24 % Energy Billed Amount (GHC Million) 36.72 59.75 64.33 97.01 125.53 Revenue Realized (GHC Million) 29.88 42.25 57.02 76.75 96.15 Collection Efficiency %age 81.36% 70.72 % 88.65 % 79.12 % 76.59% Energy Paid (GWH) 296.98 277.22 35.14 409.64 445.07 ATC & C Loss %age 39.87 % 47.60 % 36.73 % 36.38 % 38.91 % Distribution Loss %age 25
Profit and Loss Account
2007 2008 2009 2010 2011 GH¢'000 GH¢'000 GH¢'000 GH¢'000 GH¢'000 Sale of electricity 35,437 53,957 58,737 94,366 123,978 Other income 1,107 1,223 1,246 1,367 1,288 Total revenue 36,544 55,180 59,983 95,733 125,266 Operating Costs 45,299 67,437 68,800 111,171 131,312 Depreciation 16,681 19,089 25,205 23,992 29,309 Total expenses 61,980 86,526 94,005 135,163 160,621 Net Profit/Loss for the
year ( 25,436) ( 31,346) ( 34,022 ) ( 39,430) ( 35,355 ) NETWORK STATISTICS
26
2010 2011 12-Mar 34.5kV Overhead (km) 4,643 5,001 6,501 34.5kV Underground (km) 18 18 18 30kV line length (km) 126 126 164 20kV line length (km) 234 234 303 11kV Overhead (km) 1,286 1,340 1,741 11kV Underground (km) 41 41 41 No. of Bulk Supply Points serving NED 7 8 8 No. of 34.5/11KV Primary Substations
(Including Dalun & Airport) No. of Secondary Substations 7 8 8 2,293 2,609 2,791 415V line length (km) 8,540 8,990 9,618 342,906 380,046 386,468 Peak load (MW) 107 116 135 Installed Transformer Capacity (MVA) 177 201 219 Average Feeder Reliability (%) 99 99 98 Number of Customers 27
Comparison with other Utilities
Unit
Ghana
2010*
1
Average demand per customer
kW
0.31
0.31
2
Average grid tariff
GHS/MWh
209
241
3
Average grid tariff
US$/MWh
148
157
4
Annual power distributed per km
MWh/km
35
37
5
Annual revenue per km of dist. Grid
US$/km
6
Length of distr, grid per customer,
meters
meters
4,600 5,187
43
KPLC
(Kenya)
2009
Ghana
2011*
41
UK Russia
2008 2009
0.5
11.1
50.09 20.83
136
2.1
21.42
414
342
6,822 8,631
8,643
30
27
55
*The values relating to distances for Ghana (4, 5 and 6) are estimated. The actual length of the GRID is now
being determined.
28
Financial
Commercial
Technical
People &
Systems
NEDCo
Challenges
29
Challenges- Financial
!   Inadequate Tariff
!   Inadequate number of SLT ( Special Load Tariff)
Customers
!   Unwillingness of Customers (including MDAs) to pay bills
!   Low Customer Density leading to High Investment Cost
!   Difficulty in Generating Sufficient Revenue to meet
operational & working Capital
30
Challenges – Commercial
!   High Commercial Losses ( Theft & Pilferages)
!   Estimated as 9.6% of billed energy
!   Poor Metering , Billing & Collection Efficiency
!   Collection rate of 77%
!   Large & Growing Asset base with Low Demand for Electrical Energy
!   ECG’s customers per sq km are 29 whiles that of NEDCo are 2. Network
asset value per customer in NEDCo is GHS774 as at end 2011.
!   Lack of Infrastructure, Resources & Business Processes for Quality
Customer Service
31
Challenges –Technical
!   High Technical Losses - 10.6 %
!   Long Distribution network with overloaded transformers
!   Inadequate Network and Customer Mapping
!   Low Voltages (Outside Acceptable Limits) at various Feeders.
!   Aged Equipment & Poor Power System Reliability
!   Suppressed Demand
!   Lack of Spares for Effective O&M
32
Challenges - People
!   Difficulty in Recruiting & Retaining Qualified &
Experienced Staff
!   Lack of sufficient Human Capacity and absence
of Capacity Building Exercises
33
Challenges - Systems
!   Poor ICT Infrastructure
!   Lack of Resources (Customer Care Cell,
Logistics, Buildings, Tools & Equipment,
Vehicles)
!   Inadequate Business Processes
34
Objectives - Financial
!   To make NEDCo financially self-sustainable by
2017
NORTHERN ELECTRICITY DISTRIBUTION COMPANY PROJECTIONS - 2012 TO 2017 Profit and Loss Account Projections 2012 2013 2014 2015 2016 2017 GH¢'000 GH¢'000 GH¢'000 GH¢'000 GH¢'000 GH¢'000 139,646 164,698 194,575 230,217 272,552 323,076 2,254 3,945 6,903 8,629 10,786 13,482 141,900 168,642 201,478 238,846 283,338 336,558 Operating Costs 160,619 187,838 210,085 239,198 271,151 310,982 Depreciation 28,019 29,819 31,619 33,419 35,219 37,019 Total expenses 188,638 217,657 241,704 272,617 306,370 348,001 Net Profit/Loss for the year without depn (18,720) (19,196) (8,607) (353) 12,187 25,576 Net Profit/Loss for the year with depn (46,738) (49,014) (40,226) (33,772) (23,032) (11,443) 1,777 1,866 1,959 2,057 2,160 2,268 (44,962) (47,149) (38,267) (31,715) (20,872) (9,176) Sale of electricity Other income Deduct: Sonabel expected margin Adjusted net profit with Sonabel 35
Strategies – Financial (I)
!   Reduce Financial, Commercial, Technical and
Collection Losses
!   Submit proposal to PURC for a break-even tariff
!   Submit proposals to PURC and MOE for the
introduction of a levy to support NEDCo
36
Strategies – Financial (II)
!   Identify new customers such as:
!   Transfer of selected VRA customers (SONABEL) to
NEDCo
!   New border town communities
!   Collaborate with SADA, GIPC, AGI to attract large
customers to NEDCo
!   To ensure Stringent Budgetary Controls & Process
37
Financial - Projects & Investment
!   Procurement and installation of 200,000 prepayment
meters with installation accessories at a total cost of
US$17.5m as shown below
Year 2012 Project 2013 Install 30,000 meters 2014 2015 2016 2017 Install 70,000 meters Install 45,000 meters Install 55,000 meters Estimated Cost (US$) 3,000,000 7,000,000 4,000,000 3,500,000 38
Objectives - Commercial
!   Reduce commercial Losses to 6.5 % by 2017
from 9.6% in 2011
!   Improve collection rate to 97.5% by 2017 from
76.6% in 2011
!   Improve Customer service Delivery and achieve
70% satisfaction (Power Quality & Reliability,
Excellent Communication & Quick services)
39
Strategies – Commercial (I)
!   Test & Recalibrate all Energy Meters
!   Relocate Existing Energy Meters in Enclosures
!   Installation of Prepayment Meters to all
Customers
!   Intensification of Disconnection of defaulting
customers
40
Strategies – Commercial (II)
!   Increase the number of Customer Service
Centers
!   Use of IT infrastructure to improve Revenue
collection
!   Implement a new computerized billing system
and improved business processes
Commercial - Projects &
Investment
41
Initiative
Implementation of Distribution
Transformer Metering system for
Energy Audit
Implementation of streetlight
metering system
Estimated Cost
(US$)
2012 2013 2014 2015 2016 2017 3,000,000 1,250,000 1,250,000 500,000 1,900,000 1,000,000 400,000 500,000 3,500,000 2,500,000 1,000,000
200,000 Reduce commercial losses by 1% by
December 2012 by installing
120,000 prepayment meters on hand
and relocation of existing meters
Implement a new meter data
management and reporting system
200,000 Total- USD 8,600,000 2,500,000 3,450,000
- 1,650,000 - 1,000,000 42
Objectives - Technical
!   Reduce the technical losses to 6.5% by 2017 from
10.6% in 2011
!   Improve supply quality to customers in compliance
with voltage levels in LI1816
!   Provide minimum spares for effective O&M.
!   Increase Access to electricity to meet GoG agenda
of universal access by 2020
43
Strategies - Technical
!   Reinforce the Distribution Network
!   Improve Reliability & Availability of Power
!   Increase the Access of Power & increase System
Capacity
!   Implement the Technical Losses reduction exercises
!   Implementation of High Voltage Distribution System
!   Distribution Network Optimization
!   Implement an Energy Audit & Project Management Team
Technical - Projects & Investment (I)
44
Initiative
Estimated Cost
(US$)
1 Preparation of tender
documents for the
procurement of a
computerised Distribution
maintenance management
system
100,000 2 NPSIP - Sunyani and
Techiman Areas( Ongoing)
4,900,000 3 NPSIP Tamale, Bolga and Wa
Areas
4,000,000 4 Distribution Network
Rehabilitation Project
(DNRP)- Ongoing
2,500,000 5 Distribution Network
Rehabilitation Project (DNRP
Phase II & III)
26,000,000 2012 2,500,000 2,500,000 2013 2014 2015 2016 2017 100,000 2,400,000 4,000,000 - 4,000,000 4,000,000 2,000,000 16,000,000 45
Initiative
Technical - Projects & Investment (II)
Estimated
Cost (US$)
NEDCo Supply
Improvement/
Rehabilitation
Project (NSIRP)
2,500,000 6 ongoing
NEDCo Supply
Improvement/
Rehabilitation
Project (NSIRP
10,000,000 7 Phase II)
BUIPE SUBSTATION
PROJECT-ongoing
2,000,000 8 Provide part of the
needed electricity
distribution network
spares and
equipment
(transformers,
fuses, conductors,
line hardware etc)
for efficient and
effective O&M and
also for network
66,318,213 9 extensions
Installation of
Capacitor Banks to
improve voltage
5,000,000 10 levels
2012 2,500,000 2,000,000 2013 - 4,000,000 - 9,700,000 2,000,000 2014 2015 4,000,000 2,000,000 8,000,000 8,000,000 2,000,000 2016 2017 12,656,763 27,961,450 1,000,000 46
Technical - Projects & Investment (III)
Initiative
11 12 13 14 15 To develop an extensive
distribution network
development plan
Construction of about
150km of 34kV line and
associated projects to
mitigate the effect of
GRIDCo Upgrade Projects
Estimated Cost
(US$)
2012 0 21,000,000 Construction of 34.5KV bay
with eight (8) panel
breakers at Wa Switchyard
3,000,000 Construction of 59KM
length of 34.5 KV line from
Wa Main Substation to
Lassia Toulou.
2,880,000 Upgrade of 34Km length of
11.5KV line from Lassia
Toulou through Wechau to
Dorimon to 34kV and
Replacement of 3No, 20KV
transformers and 6No.
11.5KV transformers with
34.5kV transformers
2,080,000 - 2013 2014 2015 4,000,000 7,000,000 7,000,000 1,500,000 1,500,000 1,000,000 1,880,000 1,000,000 1,080,000 2016 2017 3,000,000 47
Technical - Projects & Investment (IV)
Initiative
16 Construction of 6 NO.
34/11KV SUBSTATIONS
AND INTENSIFICATION
IN ALL NEDCO AREAS
Construction of 34/11kV
substations at UDS
Tamale and Sunyani
17 Hospital
Implementation of high
voltage distribution
system and injection of
new service stations
(capacity expansion)
18 Implement distribution
system optimization
( re-configuration of
distribution lines, proper
sizing of conductors and
transformers, load
19 balancing etc)
Prepare a long term
distribution system
expansion plan to meet
the Government’s vision
20 2020 agenda
Estimated
Cost (US$)
32,000,000 2012 2013 6,000,000 2014 2015 2016 2017 7,000,000 6,000,000 6,000,000 7,000,000 20,000,000 -­‐ 8,000,000 6,000,000 6,000,000 35,000,000 -­‐ 20,000,000 15,000,000 1,000,000 3,000,000 3,000,000 1,800,000 500,000 1,300,000 7,000,000 48
Objectives & Strategies –
People & Systems (I)
!   Capacity building of personnel for effective deliveries in
knowledge, skill and attitude for about 70 staff per annum.
!   Implement ICT infrastructure (LAN, WLAN, WAN, Radio
Communication Infrastructure etc)
!   Provide adequate Logistics (vehicles (100), tools,
equipment etc)
!   Creating additional suitable office and residential
accommodation (135)
!   Review of Inadequate business processes. (new service
connection, complaints receipt and resolution systems,
customer data management systems etc)
49
Objectives & Strategies –
People & Systems (II)
!   Implementation of the approved New NEDCo
Organogram
!   To equip NEDCo Management with the required
skills and capacity to run NEDCo
!   To equip NEDCo with project management skills to
manage all projects from this plan
People & System – Project & Investment (I)
50
Estimated
2012 2013 Cost (US$)
14,000,000 1,759,357 3,240,643 3,000,000 2,000,000 4,000,000 Radio Communication
2 improvement
4,920,000 1,700,000 1,300,000 920,000 500,000 500,000 NEDCo Wide Area
Network (WAN), Local
3 Area Networks and
Wireless Broadband
4,720,000 1,500,000 200,000 200,000 NEDCo Billing System
4 Improvement
500,000 500,000 Initiative
Provide the needed
vehicles and specialised
equipment, tools, safety
1 ware etc for better
service.
A complete ICT system
to evaluate the
distribution network
loss, reduce the losses
and enhance quality
service delivery (GIS,
5 load flow analysis,
meter data
management, call
centers etc.)
2,820,000 2014 500,000 7,000,000 230,000 5,270,000 1,000,000 2015 2016 2017 51
People & System – Project & Investment (II)
Initiative
6 7 8 9 Estimated
Cost (US$)
1,570,000 2012 Effective
customer
education through
sms group
messaging
2013 2014 2016 2017 570,000 250,000 250,000 250,000 250,000 1,500,000 1,500,000 200,000 200,000 200,000 2,000,000 17,000,000 10,000,000 Create more
customer service
centres and cash
collection points
4,500,000 Improve skills of
staff & capacity
building
Provide adequate
office/residential
accommodation
(complete
ongoing projects,
provision of
furnishing for
completed
offices)
1,200,000 99,818 300,183 200,000 31,800,000 800,000 2015 -­‐ 2,000,000 1,500,000 52
Partner for Northern
Economic Development
!  
!
VRA is involved in several initiatives that will positively impact economic development in
the NEDCo operating area
!  
Construction of two hydro plants at Pwalugu and Juale by 2018/2019
!  
Construction of 10 MW of solar facilities by 2014
!  
Upgrade of inland port facilities at Buipe/Yapei and across the Volta Lake as well as injection
of new investment and equity partners in VRA lake transport subsidiary (“VLTC”)
Pwalugu 50 MW hydro plant is expected to provide important additional benefits
!  
!
Irrigation and flood control
NEDCo has commenced a close collaboration with SADA to anticipate these
developments. NEDCo’s ability to service resulting newly created commercial customers
will both provide new revenue and attract additional commercial customers for NEDCo
53
Summary – Investment (I)
Investment
Estimated Cost (USD)
Ongoing Projects (2012)
17,089,175
Short Term (Jan-13 to Dec-13)
63,950,826
Medium Term (Jan-14 to Dec-16)
192,236,763
Long Term (Jan-17 ..)
71,111,450
TOTAL (USD)
344,388,213
54
Summary – Investment (II)
Profit and Loss Account Projections 2012 2013 2014 2015 GH¢'000 GH¢'000 GH¢'000 GH¢'000 GH¢'000 GH¢'000 139,646 164,698 194,575 230,217 272,552 323,076 2,254 3,945 6,903 8,629 10,786 13,482 141,900 168,642 201,478 238,846 283,338 336,558 Operating Costs 160,619 187,838 210,085 239,198 271,151 310,982 Depreciation 28,019 29,819 31,619 33,419 35,219 37,019 Total expenses Net Profit/Loss for the year without
depn Net Profit/Loss for the year with
depn 188,638 217,657 241,704 272,617 306,370 348,001 (18,720) (19,196) (8,607) (353) 12,187 25,576 (46,738) (49,014) (40,226) (33,772) 1,777 1,866 1,959 2,057 2,160 2,268 (44,962) (47,149) (38,267) (31,715) (20,872) (9,176) Sale of electricity Other income 2016 2017 Deduct: Sonabel expected margin Adjusted net profit with Sonabel (23,032) (11,443) 55
Summary – Investment (III)
!   Subsequent to the challenges identified, NEDCo
has initiated some projects to address some of
them as outlined below:
!  Distribution Network Rehabilitation Project
(DNRP):
! NEDCo Supply Improvement and
Rehabilitation Project (NSIRP)
!  Installation of Prepayment Meters
56
Conclusion (I)
1.  The Northern Electricity Department was
created as a result of the extension of the
National GRID to the Northern parts of Ghana.
2.  Because of the low customer density and the
absence of large industrial customers, the
design standards of the network were relaxed in
order to make the extension economically
feasible. The design was to allow for the ultimate
utilization of some components of the networks
by 1995.
3.  Despite this, no substantial investment has been
made in the network over the past 25 years
except the US$10m GEDAP assistance.
57
Conclusion (II)
4.  This lack of investment has created Financial,
Technical, Commercial and People/System
challenges to NEDCo which was formed as part
of the Power Sector Reform.
5.  Among others, the challenges have led to:
a.  Recurring financial losses to NEDCo
b.  High Distribution losses
58
Conclusion (III)
c.  Poor Collection rate
d.  Obsolete IT infrastructure
e.  Ineffective and inefficient business processes
f.  Staff with inadequate capacity
g.  Lack of logistics such as vehicles, tools and
equipment
h.  Lack of suitable office and residential
accommodation
Conclusion (IV) !   Increase Collection Efficiency
59
!   Enhance the skills of
Employees
!   Submitting a case for Tariff
Review
!   Capacity Enhancement
!   Add more Bulk Customers
!   Implement an IT Infrastructure
!   Reduce Distribution Losses
!   Reduce the Gap of Revenue Vs
Operating Expenses
60
Conclusion (V)
6.  This Business Plan has identified some
strategies and projects to address the
challenges and achieve the following:
i. 
Make NEDCo financially Self Sustainable by 2017
ii.  Bring Technical Losses to 6.5 % by 2017
iii.  Bring Commercial Losses to 6.5% by 2017
61
Conclusion (VI)
iv. 
v. 
vi. 
vii. 
Achieve Collection rate of not less than 97 % by 2017
Upgrade the IT infrastructure
Better Customer Delivery
Capacity Enhancement of Staff
7.  The total estimated cost of the investments is US$344m
out of which US$17m projects are already ongoing from
NEDCo’s own resources.
8.  We hope donors will support us to enhance our service
delivery to our customers
62
Thank You