The International Monetary Fund (IMF) has confirmed that the Government of Ghana has successfully renegotiated power purchase agreements (PPAs) with most Independent Power Producers (IPPs) as part of broader reforms aimed at restoring financial sustainability in the country’s energy sector.
In its latest staff statement following the fifth review of Ghana’s Extended Credit Facility (ECF) program, the IMF noted that the authorities have made “notable strides” in addressing long-standing challenges in the energy sector. It said the renegotiation of legacy arrears and PPAs with IPPs forms a key part of the government’s strategy to reduce excess capacity payments and improve cost efficiency.
The Fund added that quarterly tariff adjustments are now being implemented to better reflect underlying costs in the sector, while payments through the Cash Waterfall Mechanism — a framework designed to ensure transparent distribution of electricity revenues — have increased significantly in recent months.
These measures, according to the IMF, are helping to stabilize the finances of energy-sector entities and reduce the accumulation of arrears that have in the past weighed heavily on public finances.
The government’s energy sector reforms are a central element of Ghana’s ongoing IMF-supported economic program, which seeks to promote fiscal discipline, enhance governance, and ensure long-term debt sustainability.
IMF staff and Ghanaian authorities recently reached a staff-level agreement on the fifth review of the $3 billion Extended Credit Facility program, subject to approval by the Fund’s Executive Board.
