Dr John Abdulai Jinapor, Minister of Energy and Green Transition, says the Government has cleared about US$1.47 billion in legacy debts within the energy sector to restore financial stability and investor confidence.
He said the debt clearance had helped to improve the financial position of the sector and strengthen the ability of the Government to meet its obligations to key stakeholders, particularly Independent Power Producers (IPPs).
Dr Jinapor, who was speaking on behalf of President John Dramani Mahama at the commissioning of the new Head Office Complex of the Public Utilities Regulatory Commission (PURC) in Accra, said the Government had also improved payments to IPPs through reforms to the Cash Waterfall Mechanism.
He said the transition from liquid fuel to natural gas for power generation had resulted in savings of about US$500 million, forming part of broader measures to reduce generation costs.
According to the Minister, reforms to the Cash Waterfall Mechanism had significantly improved the flow of funds to IPPs, enabling them to receive close to 100 percent of their invoiced amounts.
He said before the current Government assumed office, only about 16 per cent of funds declared into the mechanism reached IPPs, resulting in producers receiving approximately 42 percent of their invoices.
“Today, we declare close to GH¢15 billion every month into the Cash Waterfall Mechanism, and IPPs receive about 100 percent of their invoice bills,” he said.
Dr Jinapor said the reforms were helping to prevent further accumulation of arrears in the power sector, which stood at about GH¢80 billion when the Government assumed office.
He also disclosed that the Government had renegotiated agreements with some IPPs, resulting in savings of about US$250 million.
He said the measures were aimed at restoring the financial viability of the energy sector and creating a more sustainable environment for electricity generation and distribution.
The Minister urged PURC to strengthen its regulatory oversight, particularly regarding the commercial performance of utility companies.
He identified the Electricity Company of Ghana (ECG) as a critical component of the sector’s financial sustainability, saying the company’s inability to recover revenues had implications for the entire electricity supply chain.
Dr Jinapor urged PURC to ensure that consumers experienced the impact of effective regulation through faster resolution of complaints, stronger enforcement and greater accountability by utility providers.
He said the Government remained committed to working with PURC and other stakeholders to improve the reliability of electricity supply while strengthening the financial sustainability of the energy sector.
