2003年-世界发展银行全球_Ghana___Corporatization_of_Distribution_Concessions_through_Capitalization_96页_358kb

Summary of ESM272: Corporatization of Distribution Concessions Through Capitalization in Ghana

Core Content

This report examines the corporatization of electricity distribution concessions in Ghana through the lens of employee stock ownership plans (ESOPs). It provides an analysis of the legal framework, financial feasibility, and international best practices for incorporating employee ownership in privatization strategies. The goal is to offer a conceptual framework for implementing ESOPs as a tool to improve the performance of the electricity sector and promote broader ownership among workers.

Main Points

1. Electricity Sector Reforms in Ghana

• The government initiated fundamental reforms to improve the electricity supply industry.
• The reforms aim to shift the government's role from operator and investor to policymaker and regulator.
• Key legal instruments were introduced: the Public Utilities Regulatory Commission Act (1997) and the Energy Commission Act (1997).
• These acts led to the creation of PURC (an independent regulatory body) and EC (Energy Commission), which oversee the regulation of tariffs and the establishment of a National Electricity Market.

2. Market Structure and Key Features

• The National Electricity Market includes:

  • Licensing of wholesale suppliers, transmission service providers, and distribution companies.
  • Open access to transmission and distribution networks, allowing for non-discriminatory pricing and transparent access charges.
  • Bilateral contracts for energy trading between generators and distribution companies.
  • System planning and indicative long-term expansion planning to ensure least-cost investment programs.

• The grid code is crucial for ensuring flexibility in electricity connection and pricing, while maintaining system integrity and customer access.

3. Privatization Program Implementation

• Privatization began as part of the Ghanaian Economic Recovery Program (1983).
• The State Enterprises Commission (SEC) was the initial implementing body, but due to slow progress, the Divestiture Implementation Committee (DIC) was formed in 1988.
• The DIC is responsible for planning, monitoring, coordinating, and evaluating divestiture transactions.
• It has no authority to approve deals, only to recommend them to the Office of the President.
• The privatization program is not centralized, with various government agencies handling different transactions.

4. Constraints and Challenges

• Lack of commitment and consensus among stakeholders.
• Employee end-of-service benefits (ESB) pose a significant challenge.
• Land title and enterprise valuations are critical issues in the privatization process.
• Insufficient resources for divestiture, which affects the pace and effectiveness of the program.
• External support from international institutions and private investors is essential.

5. Role of ESOPs in Privatization

• ESOPs are being considered as a means to involve employees in the ownership of privatized enterprises.
• The rationale for ESOPs includes:
  • Broadening share ownership and creating an ownership culture.
  • Accelerating privatization and alleviating labor concerns.
  • Building support for market reforms and privatization.
  • Improving enterprise performance and attracting foreign investors.
• The report outlines steps for implementing ESOPs, including enterprise preparation, financial structuring, and legal reforms.

Key International Experience

• United Kingdom: Offers ESOP tax incentives and employee ownership models such as profit-sharing schemes and Save-as-You-Earn (SAYE).
• United States: Has company share option schemes and statutory ESOPs.
• Bolivia: Uses ESOPs to finance privatization and ensure employee participation.
• Egypt: The Alexandria Tire Company is cited as an example of successful employee ownership.
• Jamaica: The National Commercial Bank privatization involved employee ownership and union engagement.

Legal and Financial Considerations

• The legal framework for ESOPs in Ghana is still under development.
• The report suggests reforms to facilitate the legal and financial viability of ESOPs.
• Financial prefeasibility analysis includes:
  • Financing options such as strategic investors, employees, and the Ghanaian government.
  • Scenario analysis with larger ESOP stakes.
  • Deferred payment mechanisms and repurchase obligations.
  • Tax implications and share allocation.

Conclusion

• Employee ownership requires policy support and legal reforms.
• The report concludes that ESOPs can be a key element in the privatization strategy of Ghana, provided the legal and financial frameworks are appropriately structured.
• ESOPs can help in reducing labor opposition, improving enterprise performance, and attracting investment.

Annexes

• Annex 1: International best practices with employee ownership.
• Annex 2: Role of labor unions in employee ownership.
• Annex 3: Ghana's national savings and investment trends and their relevance to ESOP financing.
• Annex 4: Discounted cash flow analysis for ESOP implementation.

Key Figures and Tables

• Figure 1.1: Proposed structure of the electricity market under the Energy Commission Act.
• Figure 1.2: Project structure of emergency IPPs.
• Table 5.1: Effects of increased ESOP participation levels.
• Table A1.1: Employee participation in capitalized companies.
• Table A1.2: Market value of companies.
• Table A1.3: ESOP return on investment.
• Table A3.1–A3.7: GDP and investment trends in Ghana.

Abbreviations

• AGI: Association of Ghanaian Industries
• ATC: Alexandria Tire Company
• BOGOF: Buy-One-Get-One-Free
• CONEPLAN: Government planning agency
• DAV: Distribution Added Value
• DIC: Divestiture Implementation Committee
• EBITDA: Earnings before interest, taxes, depreciation, and amortization
• EC: Energy Commission
• ECG: Electricity Corporation of Ghana
• ESA: Employee shareholders association
• ESB: End-of-service benefits
• ESOP: Employee stock ownership plan
• FINSAP: Financial Structural Adjustment Program
• GDP: Gross domestic product
• IMF: International Monetary Fund
• IPO: Initial public offer
• IPP: Independent power producer
• IRR: Internal rate of return
• LIBOR: London interbank offered rate
• MOME: Ministry of Mines and Energy
• NCB: National Commercial Bank of Jamaica
• NTU: National Transmission Utility
• PNDC: Provisional National Defense Council
• PPA: Power Purchase Agreements
• PURC: Public Utilities Regulatory Commission
• SAYE: Save-as-you-earn
• SEC: State Enterprises Commission
• SOE: State-owned enterprise
• TIC: Total investment income
• TUC: Trade Union Congress
• USAID: U.S. Agency for International Development
• VRA: Volta River Authority
• WSU: Worker-shareholders' union

Units of Measure

• kWh: Kilowatt-hour
• MW: Megawatt

Currency Equivalents

• US$1.00 = 2,427 Ghanaian cedis as of April 19, 1999.

Acknowledgments

• The report was prepared by a team including Mangesh Hoskote (Task Team Leader), Robert Oakshott, Angela Atherton, Oliver Campbell-White, and Olivier Fremond.
• Gerard Byam, Joel Maweni, David Binns, and David Ellerman contributed significantly.
• The Ghanaian government, private financial sector, and Ghana Trade Union Congress were instrumental in the report's preparation.
• The report was edited by Grammarians Inc. and desktop published by Sumit Kayastha from ESMAP.