ASEC applauds energy debt clearance, urges urgent reforms at ECG

The Africa Sustainable Energy Centre (ASEC) has praised the government for clearing a large portion of legacy energy sector debts, describing the move as a major boost to confidence in the power industry.

The commendation follows the government’s announcement that it had paid US$1.47 billion within its first year to settle energy sector arrears and restore the World Bank Partial Risk Guarantee.

The payments covered outstanding obligations to gas suppliers and Independent Power Producers, helping to stabilise the sector and reduce systemic financial risks.

ASEC, in a statement signed by its Executive Director Justice Ohene-Akoto, said the debt overhang had previously posed a serious threat to power supply reliability, public finances and industrial growth, adding that it had repeatedly called for urgent action to address the situation.

While welcoming the development, ASEC warned that clearing arrears alone would not guarantee long-term stability unless the root causes of debt accumulation are tackled, especially the high revenue and commercial losses at the Electricity Company of Ghana (ECG).

According to the centre, ECG’s commercial losses remain one of the biggest drivers of financial distress in the power sector and must be dealt with urgently.

ASEC welcomed the government’s plan to fast-track key reforms, including a focus on ECG’s commercial and industrial customers in the first quarter of 2026.

It said this segment accounts for a large share of electricity consumption and revenue potential, making it critical to improving cash flows across the energy value chain.

'Ato did it!' – Franklin Cudjoe hails finance minister for historic debt turnaround

The centre also called for sustained investment in smart metering and advanced revenue management systems. Large-scale deployment of smart meters, it said, would improve billing accuracy, reduce power theft, enhance load monitoring and significantly cut commercial losses.

“These measures are essential to boosting revenue mobilisation and ensuring that payments to generators and gas suppliers are made on time, without repeated government bailouts,” ASEC noted.

Beyond ECG, the centre urged broader reforms across the sector, including cost-reflective tariffs, better power procurement planning, stronger regulatory enforcement, improved corporate governance and transparent operation of the Cash Waterfall Mechanism.

ASEC stressed that while the clearance of arrears is commendable, only deep and institutionalised reforms — particularly at ECG — will permanently break the cycle of debt accumulation in the energy sector.

The centre said it remains committed to working with the government, regulators, utilities, and industry stakeholders through policy advocacy, research and engagement to build a financially sustainable, efficient and resilient energy sector that can support industrial growth and national development.

SP/AE

All you need to know about Ghana's new vehicle number plates |BizTech: