Government eyes debt restructuring with IPPs to tackle energy sector challenges

1 min read
Government eyes debt restructuring with IPPs to tackle energy sector challenges

To address the financial challenges plaguing Ghana's energy sector, the government has signalled its intention to reach an agreement with Independent Power Producers (IPPs) on debt restructuring. Dr. , Finance Minister, highlighted the importance of this move during a press briefing at the conclusion of Ghana's participation in the ()/ Group (WBG) Spring Meetings in Washington, US.

Dr. Adam emphasized that resolving the energy sector's financial difficulties is crucial, particularly in light of recent power outages experienced nationwide. He acknowledged the burden posed by the accumulated debt in the energy sector, including legacy debt, despite the absence of excess capacity.

“We have renegotiated with the IPPs to restructure the debt,” Dr. Adam stated, expressing confidence that the renegotiation would lead to a reduction in debt overhang and shortfalls. He anticipated that the agreement with IPPs would be finalized within the next month.

The Finance Minister outlined broader reforms aimed at achieving financial sustainability in the energy sector, including the implementation of the Energy Sector Recovery Programme initiated in 2019. Renegotiating IPPs agreements to lower generation costs and implementing quarterly tariff adjustments were highlighted as key measures.

Furthermore, Dr. Adam revealed the government's plan to procure one million revenue-efficient meters through a partnership with the , aimed at enhancing revenue collection and operational effectiveness within the value chain.

However, amidst these efforts, the (IES) called for urgent collaboration between the Energy and Finance Ministries to address current energy sector challenges. Nana Amoasi VII, Executive Director of IES, stressed the importance of providing necessary funding to address technical and commercial losses within the (ECG). He recommended the deployment of smart meters and improvements in the distribution system to mitigate losses and ensure reliable electricity services conducive to economic growth and development.

As Ghana navigates its energy sector challenges, the government's commitment to implementing reforms and collaborating with stakeholders underscores its determination to achieve sustainability and provide reliable and affordable electricity to its citizens.

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