The Electricity Company of Ghana (ECG) is grappling with an overwhelming debt burden of GHS 67 billion as of March 2025, a revelation that underscores
The Electricity Company of Ghana (ECG) is grappling with an overwhelming debt burden of GHS 67 billion as of March 2025, a revelation that underscores the persistent financial crisis within Ghana’s energy sector.
The figure was disclosed by Energy and Green Transition Minister, John Abdulai Jinapor, during a parliamentary session on Wednesday, June 4, 2025, in response to a question posed by Kwame Dzudzorli Gakpey, Member of Parliament for Keta.
This massive debt, according to the minister, although marginally reduced due to recent improvements in the cedi’s exchange rate, remains a key challenge threatening the stability of power generation and distribution in the country.
Legacy of Financial Strain
ECG’s debt situation is not new. The company has for years battled revenue losses, inefficiencies, and mounting arrears to Independent Power Producers (IPPs).
Jinapor noted that technical and commercial losses—which stood at 22% prior to 2017—ballooned to nearly 40% under the previous administration.
While current reforms have started to reverse this trend, he emphasized that the figures are still worryingly high.
“When we were leaving office, the losses were around 22%. On assumption of office, it had hit almost 40%,” Jinapor stated, referencing the change in governance following the 2016 elections.
He added that although the current administration has seen a slight drop in those losses, the sector continues to hemorrhage money.
Reform Measures
In light of the dire situation, the Minister announced a comprehensive multi-pronged strategy aimed at rescuing ECG from its financial abyss. Key measures include:
Boosting revenue mobilization and cutting down operational losses
Signing performance agreements between ECG district and general managers and the Ministry of Energy
Renegotiating power purchase agreements with IPPs to ease financial pressure
Encouraging private sector participation in ECG’s billing and revenue collection processes
“We want to work to increase revenue and also reduce losses,” Jinapor said, emphasizing that performance metrics will now be central to how ECG managers are evaluated.
While ruling out a complete privatization of ECG, the government is banking on increased private sector involvement in specific operational areas like revenue collection and metering.
This, officials believe, could help reduce leakages, increase accountability, and improve service delivery.
This approach aligns with broader policy shifts aimed at enhancing energy sector governance and transitioning toward sustainable power infrastructure.
COMMENTS