The Africa Sustainable Energy Centre (ASEC) has taken note of the Government of Ghana’s statement titled “Mahama Administration Pays US$1.470 Billion to Clear Energy Sector Debt and Restore World Bank Guarantee Within First Year” and commends the Administration for the decisive actions taken to stabilise Ghana’s energy sector.
ASEC welcomes the clearance of legacy energy sector debts, the restoration of the World Bank Partial Risk Guarantee, and the settlement of outstanding obligations to gas suppliers and Independent Power Producers.
These actions represent a critical step in reducing systemic risk, restoring investor confidence, and strengthening Ghana’s credibility with international partners.
ASEC notes that this intervention aligns with several prior calls by ASEC for urgent Government action to address the unsustainable accumulation of energy sector arrears, which had become one of the most significant threats to power supply reliability, public finances, and industrial growth.
While commending these achievements, ASEC stresses that the long-term sustainability of these gains depends on resolving the persistent revenue and commercial losses at the Electricity Company of Ghana (ECG).
ECG’s total system losses—widely estimated at over 30 per cent of energy distributed—translate into billions of Ghana cedis in lost revenue annually, undermining the entire power sector value chain.
ASEC therefore urges Government to accelerate the implementation of the following priority reforms, consistent with recommendations previously advanced by ASEC:
- Comprehensively reform ECG’s commercial operations by Q1 2026, with a strong focus on privatising the commercial arm of ECG, deploying smart meter technology at scale, strengthening revenue management and data analytics, reducing technical and commercial losses, improving corporate governance and accountability, and enforcing disciplined billing and collections to significantly boost revenue mobilisation and eliminate avoidable leakages.
- Maintain disciplined implementation of the Cash Waterfall Mechanism to ensure predictable and timely payments across the energy value chain.
- Align tariffs with cost-reflective principles, while protecting vulnerable consumers through targeted and transparent subsidies.
- Improve power procurement and long-term planning to avoid excess capacity costs that continue to burden the sector financially.
ASEC emphasises that while clearing inherited arrears is commendable, only deep, institutionalised reforms—particularly at ECG—will permanently break the cycle of energy sector debt accumulation.
ASEC reaffirms its commitment to supporting Government and stakeholders through policy advocacy, research, and stakeholder engagement to build a financially sustainable, efficient, and resilient energy sector that underpins industrial growth and national development.
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