The government has cleared about US$1.47 billion in legacy debt and has made savings of about $750 milllion in Ghana’s energy sector. Significant savings have been made through a series of financial and operational reforms.
According to the Minister for Energy and Green Transition, Dr John Abdulai Jinapor, government saved approximately US$500 million by shifting power generation from expensive liquid fuels to relatively cheaper natural gas, while renegotiations with Independent Power Producers (IPPs) yielded an additional US$250 million in savings.
He added that, reforms to the Cash Waterfall Mechanism significantly improved the flow of funds to power producers and helped prevent the accumulation of new arrears. The Cash Waterfall Mechanism (CWM) is a transparent, rule-based financial model used to equitably distribute electricity revenues collected by the Electricity Company of Ghana (ECG) to power sector players, including independent power producers (IPPs). According to the Minister, monthly declarations into the mechanism have now increased to nearly GH¢15 billion, from a GH¢6 billion a month, with most IPPs receiving close to 100% of their invoices.
“Before we came to office, just about GH¢6 billion was declared monthly into the Cash Waterfall. IPPs were receiving just about 42%.”
Dr Jinapor said the reforms were introduced against the backdrop of a severe financial crisis in the energy sector, with outstanding obligations estimated at about GH¢80 billion.
The latest figures build on earlier disclosures by the Minister that the government had renegotiated IPP agreements, with the revised arrangements saving more than US$250 million and reprofiling about US$1.1 billion in remaining legacy obligations over four years.
Earlier this year, Dr Jinapor reported on the reforms to the Cash Waterfall Mechanism, the increased monthly declarations and the fact that some IPPs are receiving 100% of their invoices. He attributed the improvement to stricter enforcement of the rules of the mechanism and measures taken to ensure that sector revenues are channelled through the designated account.
The government pursued measures to reduce the cost of thermal power generation by increasing the use of natural gas and reducing dependence on imported liquid fuels. In January, the Minister said Ghana had increased domestic gas consumption by about 70 million standard cubic feet per day, with a further 30 million standard cubic feet per day supplied from Nigeria. The reforms also include a review of contracts at the Electricity Company of Ghana (ECG). Dr Jinapor previously disclosed that 347 ECG contracts had been reviewed, resulting in the cancellation of 202 contracts valued variously at about US$227 million, £1.17 million and €4 million.
The Energy Minister said the measures are intended to restore financial discipline, improve the sustainability in the finances of the power sector and ensure efficiency, so that, government does not continue accumulating costly debts especially to power producers.
The government linked the reforms to improved power supply. In January, 2026 Dr Jinapor said Ghana had gone for about 10 months without a day of load shedding, attributing the stability partly to increased gas utilisation and reduced reliance on liquid fuels.
Until recent challenges which have resulted in widespread outages there was indeed stable power. According to him, the government would continue implementing measures aimed at strengthening the financial position of the energy sector while ensuring reliable and affordable electricity supply.
