Dr John Abdulai Jinapor, the Minister of Energy and Green Transition, on Thursday said the government paid off about $1.47 billion in legacy debt within Ghana’s energy sector.
That, he explained, had rekindled confidence and brought financial stability as well as viability to the energy sector.
Dr Jinapor, speaking on behalf of President John Dramani Mahama at the commissioning of the new Head Office Complex of the Public Utilities Regulatory Commission (PURC) in Accra, said there had been improved payments to Independent Power Producers (IPPs).
He noted that the shift from using liquid fuel to natural gas had enabled the government to save approximately $500 million.
He said the savings formed part of broader reforms aimed at reducing the cost of power generation and strengthening the financial position of the energy sector.
Dr Jinapor said reforms to the Cash Waterfall Mechanism had significantly improved payments to Independent Power Producers (IPPs), enabling them to receive close to 100 per cent of their invoiced amounts.
He said before the government assumed office, only about 16 per cent of funds declared into the Cash Waterfall Mechanism reached IPPs, who received approximately 42 per cent of their invoices.“Today, we declare close to GH¢15 billion every month into the Cash Waterfall
Mechanism, and IPPs receive about 100 per cent of their invoice bills,” he said.
He said the measures were helping to reduce the accumulation of arrears in the
power sector, which stood at about GH¢80 billion when the government assumed
office.
The Minister also disclosed that government had renegotiated agreements with
some IPPs, resulting in savings of about $250 million.
He said the reforms were intended to restore the financial viability of the energy
sector and create a more sustainable environment for electricity generation and
distribution.
Dr Jinapor urged the PURC to intensify its regulatory oversight, particularly of the commercial performance of utility companies.
He singled out the Electricity Company of Ghana (ECG) as a critical link in the financial sustainability of the energy sector, stressing that the inability of ECG to recover revenues had implications for the entire electricity supply chain.Dr Jinapor urged PURC to ensure that consumers felt the presence of the
regulator through faster resolution of complaints, stronger enforcement and
greater accountability by utility providers.
The government remained committed to working with PURC and other
stakeholders to improve the reliability of electricity supply while strengthening
the financial sustainability of the sector, he added.