The Africa Sustainable Energy Centre (ASEC) has praised the government for settling a significant part of longstanding energy sector debts, calling it a big step toward rebuilding confidence in the nation’s power industry.
Reacting to the government’s announcement that it had paid US$1.47 billion in its first year to clear energy sectorars, ASEC said the move had lowered systemic risk and boosted confidence among investors, development partners, and industry players.
The government announced that the payments settled outstanding debts to gas suppliers, Independent Power Producers (IPPs), and other industry stakeholders, while also restoring the World Bank Partial Risk Guarantee, a key element in supporting power sector financing.
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According to ASEC, the debt overhang had become a serious threat to power supply reliability, public finances and industrial growth, making the recent intervention both timely and necessary. The think-tank noted that it had previously called for urgent action to prevent the crisis from deepening.
However, ASEC cautioned that clearing arrears alone would not guarantee long-term stability unless the structural causes of debt accumulation are addressed, particularly the chronic revenue and commercial losses at the Electricity Company of Ghana (ECG).
“ECG’s high commercial losses remain one of the most significant contributors to recurring financial distress in the power sector and must be addressed as a matter of urgency,” the statement signed by its Executive Director, Justice Ohene-Akoto said.
ASEC welcomed government’s indication that it would fast-track key reforms, including a focus on ECG’s commercial and industrial customers in the first quarter of 2026.
It argued that this customer segment accounts for a large share of electricity consumption and revenue potential, and that improving revenue assurance in this area is critical to strengthening cash flows across the energy value chain.
The Centre also called for major investment in smart metering and advanced revenue management systems. It said large-scale deployment of smart meters would improve billing accuracy, reduce electricity theft, enhance load monitoring and significantly cut commercial losses.
“These measures are essential to boosting revenue mobilisation and ensuring timely payments to generators and gas suppliers without repeated government bailouts,” ASEC noted.
Beyond ECG, ASEC urged broader reforms across the sector, including the introduction of cost-reflective tariffs, better power procurement planning, stronger regulatory enforcement, improved corporate governance and transparent operation of the Cash Waterfall Mechanism.
While praising the clearance of arrears as a major milestone, ASEC stressed that only deep and institutionalised reforms—especially at ECG—would permanently break the cycle of debt accumulation in the energy sector.
The Centre said it’s committed to working with the government, regulators, utilities, and industry stakeholders through policy advocacy, research, and engagement to create a financially sustainable, efficient, and resilient energy sector that can drive industrial growth and support national development.
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