Ghana’s Independent Power Generators (IPGs) have welcomed the government’s settlement of a substantial portion of long-standing payment arrears owed to power generation companies, describing the move as a critical step toward restoring financial stability, strengthening governance, and rebuilding investor confidence in the country’s energy sector.
In a statement released today, January 12, 2026, the IPGs said payments made in 2025 to independent power producers had eased severe liquidity constraints that have burdened the sector for several years, improving cash flow, operational planning, and confidence among market participants.
“The clearance of these long-outstanding obligations… represents a major milestone in restoring financial stability and operational confidence across the power sector,” the group said.
Ghana’s power sector has for years struggled with legacy debts arising from power purchase agreements, currency depreciation, excess generation capacity, and inefficiencies across the electricity value chain. The accumulation of arrears strained the balance sheets of power producers, increased financing costs, and discouraged new investment, while also complicating government efforts to stabilise electricity supply and tariffs.
The IPGs said the recent payments demonstrate stronger fiscal coordination and a renewed determination by authorities to address inherited structural challenges that have undermined the sector’s performance. They credited the Ministry of Finance for mobilising and deploying significant financial resources to settle part of the arrears, and the Ministry of Energy and Green Transition for reinforcing reforms aimed at improving payment discipline.
Key among these reforms is the Cash Waterfall Mechanism, which prioritises the distribution of sector revenues to critical service providers, including power generators. According to the IPGs, disciplined implementation of this mechanism has contributed to improved payment performance and greater predictability for market participants.
The group said the settlement sends an important signal to both domestic and international investors that Ghana is committed to honouring its contractual obligations and restoring credibility in its power market, at a time when competition for capital across emerging markets remains intense.
“These actions have sent a powerful signal to both domestic and international investors that Ghana is firmly committed to honouring its contractual obligations,” the statement said.
Improved payment discipline could lower perceived risk in the sector, helping Ghana attract new financing, technology, and long-term partnerships needed to modernise generation assets, expand renewable energy, and support industrial growth. The power sector is seen as a backbone of Ghana’s broader economic transformation agenda, underpinning manufacturing, mining, digital services, and job creation.
The IPGs said renewed confidence in the sector positions Ghana to deepen private sector participation while advancing reforms focused on efficiency, transparency, and value for money across the power value chain. They added that a more stable financial environment would also enhance planning for maintenance, fuel procurement, and capacity optimisation, reducing the risk of supply disruptions.
