Accra: Energy and Green Transition Minister, Dr. John Abdulai Jinapor, has announced that ongoing reforms within Ghana's energy sector have successfully cleared approximately $1.47 billion in legacy debt, resulting in substantial financial savings for the nation.
According to Ghana Web, the government has also saved around $500 million by transitioning power generation from costly liquid fuels to natural gas. Additionally, renegotiations with Independent Power Producers (IPPs) have led to further savings of approximately $250 million. Dr. Jinapor shared these developments during a press briefing held on Thursday, August 20, highlighting the progress made in stabilizing the energy sector and enhancing its financial sustainability.
Dr. Jinapor emphasized that reforms to the Cash Waterfall Mechanism have significantly improved payments to IPPs, reducing arrears accumulation and bolstering sector confidence. He noted that prior to the current administration, only about GHS6 billion was declared monthly into the Cash Waterfall, with IPPs receiving roughly 42% of their invoices. Due to policy reforms, approximately GHS15 billion is now declared monthly, allowing almost all IPPs to receive nearly 100% of their invoice bills, thus preventing arrears from building up.
The Minister also reported significant advancements in addressing the sector's accumulated financial obligations. Upon assuming office, the outstanding bill stood at approximately GHS80 billion. Through negotiations with the IPPs, the government has saved an additional $250 million, marking a clear path toward financial improvement.
Dr. Jinapor stated that these initiatives are part of a comprehensive strategy aimed at restoring financial stability to the energy sector, lowering electricity generation costs, and ensuring a more reliable power supply. The transition to natural gas, enhanced payment arrangements, and renegotiation of existing agreements are collectively reducing the state's financial burden while fostering a more sustainable energy sector.