Ghana’s energy sector has recorded significant financial gains following a series of reforms that have cleared about US$1.47 billion in legacy debt and generated additional savings of roughly US$750 million, Energy and Green Transition Minister Dr John Abdulai Jinapor has disclosed.
The savings, according to the Minister, include about US$500 million achieved by switching power generation from more expensive liquid fuels to relatively cheaper natural gas, as well as another US$250 million secured through negotiations with Independent Power Producers (IPPs).
Speaking at a press briefing on Thursday, August 20, Dr Jinapor said the reforms had also substantially improved the operation of the Cash Waterfall Mechanism and payments to power producers.
He explained that prior to the government’s interventions, only about GH¢6 billion was being declared monthly into the Cash Waterfall, with IPPs receiving approximately 42 per cent of their invoices.
The situation, he said, had changed considerably, with monthly declarations now reaching about GH¢15 billion, enabling almost all IPPs to receive full payment of their invoices.
“Because of the work we did together and the policy reforms that we implemented, today we declare close to about 15 billion every month into the Cash Waterfall mechanism and almost all the IPPs receive about 100% of the invoice bills. So we are not billing arrears like it used to be.”
Dr Jinapor said the government inherited an outstanding energy-sector bill of approximately GH¢80 billion, but negotiations with IPPs had since resulted in substantial savings.
He said the US$250 million saved through the renegotiations formed part of broader efforts to reduce the financial burden on the energy sector while ensuring continued power supply.
The Minister also attributed the US$500 million savings to the increased use of natural gas for power generation instead of more expensive liquid fuels.
According to him, the combined interventions are helping to improve the financial sustainability of the sector and reduce the cost of electricity generation.
Dr Jinapor said the government would continue implementing reforms aimed at stabilising the energy sector, strengthening payment systems and addressing outstanding financial obligations.
He described the progress as evidence that the government’s policy measures were beginning to deliver measurable financial benefits while improving the relationship between the state and power producers.
