The Electricity Company of Ghana (ECG) recorded a significant improvement in its financial performance in 2025, with higher revenues, reduced net losses, improved tariff recovery, lower supplier obligations and stronger liquidity, but the gains conceal deep structural weaknesses that continue to threaten the long-term financial sustainability of Ghana’s largest electricity distributor.
The company’s audited 2025 financial statements show that ECG’s after-tax loss narrowed sharply from GH¢8.26 billion in 2024 to GH¢2.52 billion in 2025, representing an improvement of GH¢5.73 billion.
However, the reduction in the bottom-line loss was not primarily driven by a fundamental turnaround in ECG’s core electricity distribution business.
Instead, the improvement was significantly supported by foreign exchange gains, government-backed financial interventions, tariff adjustments and exceptional income items.
The accounts reveal a utility that remains heavily dependent on external support to remain financially stable, with its core operations still generating significant losses and negative cash flows.
While 2025 marked progress compared with the severe financial stress of 2024, the figures suggest that ECG’s journey towards genuine financial sustainability remains incomplete.
Revenue grows, but electricity supply costs continue to overwhelm ECG
ECG recorded strong revenue growth in 2025, reflecting increased electricity sales and tariff adjustments approved by the Public Utilities Regulatory Commission (PURC).
Revenue increased from GH¢19.03 billion in 2024 to GH¢22.11 billion in 2025, representing a 16.2% increase.
The improvement was supported by higher electricity volumes, with power purchased rising from 16,616.49 gigawatt hours (GWh) in 2024 to 17,960.51GWh in 2025, an increase of 8.1%.
Energy sold also increased by 8.3%, moving from 12,121.66GWh to 13,133.56GWh during the same period.
The higher sales volumes helped strengthen revenue generation and contributed to the reduction in ECG’s overall loss position.
However, the improvement in revenue was not enough to offset the company’s escalating cost base.
The cost of sales increased by 10.5%, rising from GH¢31.47 billion in 2024 to GH¢34.77 billion in 2025.
This means ECG spent nearly GH¢35 billion purchasing electricity and delivering services while earning only GH¢22.11 billion from revenue.
As a result, the company recorded a gross loss of GH¢12.66 billion in 2025.
This represented a sharp deterioration from the GH¢4.6 billion gross profit recorded in 2024.
However, the 2024 figure was significantly influenced by a government grant of GH¢17.03 billion, meaning the previous year’s performance did not fully reflect ECG’s underlying operational position.
The 2025 results therefore expose the continuing gap between the cost of supplying electricity and the amount recovered through tariffs and collections.
Operating losses deepen despite improved bottom line
While ECG’s net loss narrowed significantly, the company’s core operating performance deteriorated during the year.
Operating profit moved from a surplus of GH¢1.80 billion in 2024 to an operating loss of GH¢14.35 billion in 2025.
The company recorded an operating margin of negative 64.9%, meaning that for every GH¢100 generated from operations, ECG lost almost GH¢65 before considering finance costs and taxes.
Even after adjusting for depreciation through EBITDA calculations, the company recorded an operating cash deficit of about GH¢10.6 billion.
The figures indicate that ECG’s challenges are not merely accounting issues but reflect deeper weaknesses in its business model, where the cost of purchasing and distributing electricity remains significantly higher than the revenue recovered from customers.
Although management reduced administrative expenses by 19.6%, from GH¢2.87 billion in 2024 to GH¢2.31 billion in 2025, the savings were relatively small compared with the scale of power purchase costs.
Forex gains rescue ECG’s financial outcome
The most significant factor supporting ECG’s improved 2025 result was the dramatic reversal in foreign exchange performance.
The appreciation of the Ghana cedi during the year reduced the cedi value of foreign currency-denominated obligations and transformed ECG’s exchange position.
The company recorded a foreign exchange gain of GH¢12.16 billion in 2025, compared with an exchange loss of GH¢8.84 billion in 2024.
The difference represents a positive swing of approximately GH¢21 billion.
This single factor played a major role in reducing the company’s overall loss.
Additional support came from other income, which increased from GH¢71.18 million in 2024 to GH¢611.85 million in 2025.
Included in this figure was a GH¢519.83 million discount from Independent Power Producer (IPP) obligations.
Together, these exceptional gains helped transform what could have been another severe financial setback into a much smaller reported loss.
However, analysts have warned that foreign exchange gains cannot form the foundation of long-term financial recovery because currency movements can reverse in future years.
Cash flow raises biggest sustainability concern
Despite the improved loss position, ECG’s cash flow performance presents a more worrying picture.
Cash generated from operations collapsed from a positive GH¢6.51 billion in 2024 to a negative GH¢12.54 billion in 2025.
The decline means that ECG consumed more than GH¢12 billion in cash from its day-to-day operations during the year.
After investing GH¢7.45 billion in capital projects, the company’s free cash flow position deteriorated further.
The negative cash flow position suggests that ECG cannot currently finance its operations and infrastructure needs solely from internally generated resources.
Instead, the company remains reliant on government support, financial restructuring and external interventions.
Debt restructuring eases pressure but increases liabilities
ECG recorded a major reduction in trade and supplier obligations in 2025, particularly its outstanding payments to power producers.
Total trade and other payables declined by 14.2%, from GH¢54.50 billion in 2024 to GH¢46.74 billion in 2025.
Power purchase payables reduced significantly from GH¢45.47 billion to GH¢29.79 billion.
The improvement provided temporary relief to the electricity supply chain.
However, the reduction in supplier obligations was accompanied by a significant increase in borrowings.
ECG’s total borrowings surged from approximately GH¢5.25 billion in 2024 to GH¢24.65 billion in 2025.
The increase was largely due to the Ministry of Finance assuming about GH¢20.86 billion of ECG’s obligations to IPPs and fuel suppliers through a special financing arrangement.
While the intervention improved ECG’s immediate liquidity position, it converted unpaid supplier debts into formal borrowing obligations.
This means future debt servicing costs could place additional pressure on the company’s already weak operating cash flows.
Tariff reforms narrow recovery gap
One of the strongest areas of improvement was ECG’s tariff cost recovery position.
The company’s tariff under-recovery declined from GH¢5.75 billion in 2024 to GH¢3.91 billion in 2025, reducing the gap by approximately GH¢1.84 billion.
The unit under-recovery also improved significantly, declining from 34.63 pesewas per kilowatt-hour in 2024 to 6.15 pesewas per kilowatt-hour in 2025.
The improvement reflects better alignment between electricity tariffs and the actual cost of supplying power.
However, tariff reforms alone may not restore ECG’s financial sustainability unless accompanied by stronger efficiency measures, improved collections and reduced losses.
System losses remain ECG’s biggest operational challenge
Despite marginal improvement, system losses continued to weigh heavily on ECG’s finances.
The company purchased 17,960.51GWh of electricity in 2025 but sold only 13,133.56GWh.
This means 4,826.95GWh of electricity was lost before generating revenue.
System losses reduced marginally from 27.05% in 2024 to 26.88% in 2025.
Although the reduction represents progress, the level remains significantly high and continues to deprive ECG of potential revenue.
The losses are linked to technical inefficiencies, ageing infrastructure, illegal connections, electricity theft, faulty meters and unmetered consumption.
Every percentage point reduction in system losses represents significant revenue recovery opportunities for the company.
Investment increases as ECG targets network improvement
Despite financial pressures, ECG increased investment in infrastructure during 2025.
Capital expenditure rose by 21.4%, from GH¢6.14 billion in 2024 to GH¢7.45 billion in 2025.
The company’s work-in-progress portfolio also expanded from GH¢14.69 billion to GH¢17.12 billion.
The investments are expected to support network expansion, improve reliability, strengthen metering systems and reduce technical losses.
However, the long-term financial benefit will depend on whether these investments translate into measurable efficiency improvements.
Receivables continue to constrain liquidity
ECG’s receivables position remains another major challenge.
Trade and other receivables increased by 32.8% to GH¢20.10 billion in 2025.
Private sector customers accounted for more than GH¢10.65 billion of outstanding debts.
Although government MDAs’ outstanding obligations improved significantly, falling from GH¢2.64 billion in 2024 to GH¢1.58 billion in 2025, unpaid customer bills continue to lock up critical working capital.
The company also continues to carry the burden of a GH¢3.70 billion legacy receivable linked to the failed Power Distribution Services (PDS) concession.
Without major improvements in revenue collection, higher sales volumes may continue to generate accounting revenue without translating into actual cash.
ECG’s recovery remains fragile
The 2025 audited accounts present two contrasting realities.
On one hand, ECG achieved a remarkable improvement in its reported financial outcome, reducing its net loss by more than GH¢5.7 billion, increasing revenue, lowering payables, improving tariff recovery and strengthening cash reserves.
On the other hand, the company’s core business remains structurally weak, with massive operating losses, negative cash flows, high system losses and growing debt obligations.
The reduction in net loss was largely driven by favourable foreign exchange movements, government interventions and exceptional income rather than a complete operational turnaround.
For ECG to achieve genuine financial sustainability, the company must move beyond temporary relief measures and address the fundamental weaknesses affecting its operations.
Reducing system losses, improving revenue collection, maintaining cost-reflective tariffs, strengthening operational efficiency and ensuring that infrastructure investments deliver measurable results will determine whether ECG’s 2025 improvement becomes a lasting recovery or merely a temporary financial reprieve.
