Ghana has cleared GHS 1.4 billion in legacy debts owed to Independent Power Producers (IPPs). This significant financial action aims to ensure a reliable and sustainable power supply for investors, especially within industrial zones. Deputy Minister of Energy and Green Transition, Mr. Richard Djan-Mensah, confirmed this at the 60th Annual General Meeting of the Association of Power Utilities of Africa (APUA) in Accra.
The government is directing substantial resources towards strengthening efficient energy supply systems. This effort supports economic growth across the nation. The clearance of these debts addresses a major financial burden that previously affected the energy sector's stability. It signals a commitment to improving the operational environment for power producers and consumers.
This development fits into Ghana's broader economic strategy to attract foreign direct investment. Reliable power is crucial for industrial expansion and job creation. The energy sector has seen ongoing financial reforms, which have improved cash flow significantly. Current payments in the sector have risen from GHS 6 billion to over GHS 150 billion, demonstrating enhanced financial health.
Mr. Djan-Mensah stated that electricity access has reached approximately 89% nationwide. He added that installed generation capacity now exceeds 5,300 megawatts. The dependable capacity stands at more than 4,700 megawatts, ensuring sufficient power reserves. Transmission availability remains high at about 99.5%, indicating a robust infrastructure.
The government has also secured over $250 million in savings by renegotiating Power Purchase Agreements (PPAs). These renegotiations have made energy procurement more cost-effective. Furthermore, the government restored $500 million in World Bank partial risk guarantees for key gas projects. These guarantees provide financial security for critical energy infrastructure.
The Volta River Authority (VRA) continues to supply nearly 2,550 megawatts from diverse sources. These sources include hydro, thermal, and renewable energy. The Ghana Grid Company Limited (GRIDCo) operates more than 5,100 kilometres of high-voltage transmission infrastructure. This extensive network ensures efficient power distribution across the country.
Mr. Djan-Mensah acknowledged that the government inherited a challenging energy sector. This sector was burdened with high IPP debts. However, ongoing negotiations have enabled the settlement of about 70% of these legacy obligations. This progress highlights the government's dedication to resolving long-standing issues.
Mr. Abel Didier Tella, Director-General of the Association of Power Utilities of Africa, urged African leaders to increase investment in the energy sector. He stressed that sustained investment is critical for Africa's industrial ambitions. The Chief Executive Officer of the Volta River Authority, Mr. Edward Obeng-Kenzo, called for stronger collaboration among African energy institutions. He believes better interconnection will allow more efficient electricity flow.
The improved stability in Ghana's energy sector is expected to boost investor confidence. Businesses will benefit from more reliable electricity, reducing operational disruptions. This stability is vital for Ghana's economic growth targets and its position as an attractive investment destination in West Africa. Future developments will focus on maintaining financial discipline and expanding renewable energy sources.