The government has cleared about US$1.47 billion in legacy debt within Ghana’s energy sector as part of ongoing measures to improve the sector’s financial stability, Minister for Energy and Green Transition, Dr John Abdulai Jinapor, has disclosed.

Dr Jinapor said the government had also saved approximately US$500 million by shifting electricity generation away from more expensive liquid fuels to relatively cheaper natural gas.

He said the savings formed part of broader reforms aimed at reducing the cost of power generation and strengthening the financial position of the energy sector.

Speaking at a press briefing on Thursday, August 20, the Minister said reforms to the Cash Waterfall Mechanism had also improved payments to Independent Power Producers (IPPs), while negotiations with the companies had resulted in an additional US$250 million in savings.

“Before we came to office, just about 6 billion was declared monthly into the Cash Waterfall. IPPs were receiving just about 42%. Because of the work we did together and the policy reforms that we implemented, today we declare close to 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,” he said.

Dr Jinapor said the reforms had significantly reduced the accumulation of arrears in the sector, noting that the outstanding energy-sector debt stood at about GH¢80 billion when the government assumed office.

“We have also negotiated with the IPPs, and we have saved about $250 million again from them. So clearly we are making significant progress,” he said.

He said the interventions, including debt clearance, improved payment arrangements, fuel-switching and negotiations with IPPs, were part of government’s broader strategy to stabilise the energy sector, reduce power generation costs and place the sector on a more financially sustainable footing.