The Africa Sustainable Energy Centre (ASEC) has commended the Government of Ghana for clearing legacy energy sector debts, describing the move as a significant step toward stabilising the country’s power sector and restoring international confidence.
In a statement, ASEC welcomed the government’s announcement that the Mahama Administration had paid US$1.470 billion within its first year to settle energy sector arrears and restore the World Bank Partial Risk Guarantee.
According to the Centre, the settlement of outstanding obligations to gas suppliers and Independent Power Producers (IPPs) represents a critical milestone in reducing systemic risk, strengthening power supply reliability, and rebuilding Ghana’s credibility with international partners.
ASEC noted that the intervention aligns with its long-standing calls for urgent government action to address the unsustainable accumulation of energy sector debts, which had become a major threat to public finances, industrial growth, and the reliability of electricity supply.
While applauding the achievement, ASEC cautioned that the long-term sustainability of the gains depends largely on addressing persistent revenue and commercial losses at the Electricity Company of Ghana (ECG).
The Centre pointed out that ECG’s total system losses, estimated at over 30 per cent of energy distributed—translate into billions of cedis in lost revenue each year, undermining the entire power sector value chain.
To prevent a recurrence of energy sector debt, ASEC urged the government to accelerate key structural reforms.
These include comprehensive reforms of ECG’s commercial operations by the first quarter of 2026, with a strong focus on privatising its commercial arm, deploying smart meters at scale, strengthening revenue management and data analytics, reducing technical and commercial losses, and improving corporate governance, accountability, billing, and collections.
ASEC also called for the disciplined implementation of the Cash Waterfall Mechanism to ensure predictable payments across the energy value chain, the alignment of tariffs with cost-reflective principles while protecting vulnerable consumers through targeted subsidies, and improved power procurement and long-term planning to avoid costly excess capacity.
The Centre emphasised that although clearing inherited arrears is commendable, only deep and institutionalised reforms, particularly at ECG will permanently break the cycle of energy sector debt accumulation.
ASEC reaffirmed its commitment to supporting the government and other stakeholders through policy advocacy, research, and engagement aimed at building a financially sustainable, efficient, and resilient energy sector to underpin Ghana’s industrial growth and national development.
