Ghana energy reforms clear $1.47bn legacy debt

Ghana’s Minister for Energy and Green Transition, Dr. John Abdulai Jinapor, announced that energy sector reforms have cleared approximately US$1.47 billion in legacy debt and generated US$750 million in savings.

Key drivers of these savings include a US$500 million reduction achieved by shifting power generation from expensive liquid fuels to more cost-effective natural gas, alongside US$250 million saved through renegotiations with Independent Power Producers (IPPs).

Additionally, reforms to the Cash Waterfall Mechanism (CWM)—a rule-based model used to distribute electricity revenues—have significantly improved fund flows. Monthly declarations into the mechanism have risen from GH¢6 billion to nearly GH¢15 billion. This increase has allowed most IPPs to receive close to 100% of their invoices, compared to a previous rate of approximately 42%, helping to prevent the accumulation of new arrears.