The government says ongoing reforms in Ghana’s energy sector are strengthening financial sustainability, cutting costs and preventing the return of large debts owed to Independent Power Producers (IPPs).
Deputy Energy Minister Richard Gyan-Mensah disclosed this at the 60th Annual Meeting of the Association of Power Utilities of Africa, where he said the government inherited significant challenges, including mounting IPP debts and operational inefficiencies.
According to him, the renegotiation of IPP agreements has already generated savings of more than $240 million, with additional measures underway to reduce costs across the power sector.
Mr Gyan-Mensah said the government is also reviewing tariffs and strengthening the cash waterfall mechanism to improve revenue management and ensure the sector remains financially sustainable.
He noted that the reforms have enabled the government to avoid the accumulation of large outstanding debts to IPPs, with some producers currently receiving between 80 and 90 percent of their monthly payments.”We are looking forward to a time where we will be able to achieve 100 percent monthly IPP payments,” he said.
The Deputy Minister added that improved revenue collection by the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) is helping reinforce financial discipline across the sector.
Also speaking at the event, Volta River Authority (VRA) Chief Executive Officer Edward Obeng Kenzo stressed that reliable and affordable electricity is essential for Ghana’s economic transformation.
He said stable power supply is critical to supporting industrial growth, the mining sector and small and medium-sized enterprises, describing electricity as the foundation for sustained economic development.