Government clears $1.47bn energy sector legacy debt – Jinapor
The government has paid off about US$1.47 billion in legacy debts owed within Ghana’s energy sector as part of efforts to restore financial stability and improve the sustainability of the industry. Minister for Energy and Green Transition, Dr John Abdulai Jinapor, said the government had also cut expenditure by approximately US$500 million by increasing the […]
The Ghanaian government has successfully paid off approximately US$1.47 billion in legacy debts within the country's energy sector, as part of its ongoing efforts to restore financial stability and enhance the sector's sustainability. Energy Minister Dr John Abdulai Jinapor announced these achievements during a press briefing on August 20, 2026, detailing the measures taken by the government to tackle the financial challenges facing the energy industry.
Dr Jinapor revealed that the government had also decreased its expenditure by around US$500 million by increasing the utilization of natural gas for power generation, replacing more expensive liquid fuels. At a press conference, he emphasized the crucial role of reforms to the Cash Waterfall Mechanism, which has significantly improved the flow of funds to Independent Power Producers (IPPs).
He explained that monthly payments declared into the mechanism had surged from approximately GH¢6 billion to nearly GH¢15 billion, enabling most IPPs to receive nearly the full amount of their invoices.
Previously, IPPs were only receiving about 42% of their invoices, but due to the government's reforms and policy changes, the current monthly declaration into the Cash Waterfall Mechanism has increased to close to GH¢15 billion, with almost all IPPs now receiving around 100% of their invoices. Dr Jinapor highlighted that the improved payment system has helped prevent the accumulation of new arrears and noted that when the government took office, the energy sector's outstanding debt was around GH¢80 billion.
He further stated that negotiations with IPPs had further reduced the financial burden on the state by approximately US$250 million.
According to Dr Jinapor, the combination of debt repayment, improved revenue distribution, greater reliance on natural gas, and successful negotiations with power producers is contributing to the energy sector's more stable financial position. The Minister expressed the government's commitment to continuing these reforms aimed at lowering the cost of electricity generation and preventing the recurrence of past financial challenges that have historically plagued the energy sector.
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