By Juliet ETEFE
President John Dramani Mahama has revealed that the country’s energy sector is facing a debt crisis of GHȼ70billion, posing a threat to stable electricity supply.
Presenting the SONA 2025, he outlined a plan to address the sector’s financial shortfalls and ensure long-term energy sustainability.
“My administration inherited an energy sector on the brink of collapse, which was weighed down by unsustainable debts. This unfortunate situation has led to many Independent Power Producers (IPPs) and fuel suppliers threatening to cease their operations.
“Despite collecting over GHȼ45 billion in Energy Sector Levies (ESLA) over the last eight years, the outgone NPP administration has left the Ghanaian people an energy sector burdened with a staggering GHȼ70 billion debt as of December 2024.
“It is of deep concern that several state-owned enterprises (SOEs) in the energy sector are struggling to stay afloat. Unless urgent interventions are made, many of them will go under.
“Financial distress in the energy sector remains a significant obstacle to delivering consistent and affordable electricity to Ghanaians and poses an existential threat to the economy in general,” he stated.
The government will focus on restructuring energy sector debts, enforcing a single revenue collection account, and increasing efficiency in electricity billing and metering.
The President also emphasised the need for a shift towards gas-powered electricity generation to reduce reliance on expensive crude oil.
“While the current state of the energy sector poses grave concerns, we must remain resolute in our commitment to restoring stability. I have directed the Minister for Energy and Green Transitions to implement far-reaching reforms, including enforcing a single revenue collection account, strictly adhering to the Cash Waterfall Mechanism (CWM), and eliminating wasteful expenditures.
The Minister, following my directive has set up an advisory committee to guide the participation of the private sector in metering and billing in order to improve efficiency in revenue collection and reduce the high commercial and technical losses that are threatening to drown the state-owned utility company,” he added.
He further noted that “A pilot partnership between ECG and Enclave power has proved highly successful and provides us with a workable framework. ECG provides bulk supply of power to Enclave Power Limited. Enclave Power provides meters and bills all companies operating in the Free Zones Enclave with 99% revenue collection and nearly 100% uptime in power supply.
“Reduction in commercial and technical losses will lead to affordable tariffs for everyone and bring relief to all users of electric power. We also aim in the medium term to achieve 100% gas utilisation for power production and eliminate the use of crude oil. This will save Ghana hundreds of millions of dollars spent on the importation of fuel oils for power production.”
Renewable energy
“With regards to renewable energy, this administration will soon operationalise a Renewable Energy and Green Transition Fund to enhance efficiency and accelerate Ghana’s transition to renewable energy.
This initiative will drive investment in sustainable energy solutions, including solar street lighting, rooftop solar installations, off-grid solar systems, electric vehicle charging stations, and chargeable outboard motors. These measures will reduce dependence on the national grid and position Ghana as a leader in Africa’s green energy transition,” he said.
