In a rather shocking revelation during his parliamentary vetting, Energy Minister Designate, Mr. John Abdullai Jinapor, disclosed that Ghana’s energy sector debt has skyrocketed to approximately $3 billion. This staggering figure represents a significant increase from the initial estimate of $2.1 billion, primarily attributed to unaccounted power sales.
The Energy Sector Levy Act (ESLA) has been instrumental in covering a portion of the interest on the principal debt. However, the escalating debt raises concerns about the sustainability of Ghana’s energy sector. The International Monetary Fund (IMF) had previously warned that Ghana’s energy sector debt would remain above $1 billion until 2024 if the government failed to implement the Energy Sector Recovery Plan.
Ghana’s power industry has been plagued by challenges, including excess power generation capacity, limited transmission capacity, and significant distribution losses. The government has signed Power Purchase Agreements (PPAs) with 32 Independent Power Producers (IPPs), resulting in excessive supply over demand and high fixed costs.
As Ghana struggles to manage its energy sector debt, the country must confront the pressing need for reforms and sustainable solutions to ensure a stable and efficient energy sector.
Ruth Abla ADJORLOLO