Ghana’s energy sector is on the brink of a major crisis as the operators of the Karpowership Plant, located in Kumasi, have warned the government that they will stop supplying power unless their debt of $379 million is settled immediately.
The warning was issued during a meeting between the Minister of Energy and Green Transition, Mr. John Jinapor, and officials of the Karpowership barge at the Ministry. The Electricity Company of Ghana owes the company this staggering amount, which has raised concerns about the government’s ability to manage the energy sector.
In response, Mr. Jinapor appealed to the operators of the plant to exercise restraint while the new administration explores alternatives to settle the bills. However, the situation is dire, with Ghana’s energy sector facing a critical challenge with its debt burden escalating to over $3 billion as of January 12, 2025.
The International Monetary Fund (IMF) has raised several red flags, cautioning that the government needs to undertake far-reaching reforms to save the sector from imminent collapse. Ghana’s energy sector accrues about $1 billion in debt annually, with $500 million from excess capacity charges. The World Bank estimates that Ghana loses over $680 million yearly from power outages.
The situation is a wake-up call for the government to take immediate action to address the energy sector’s debt crisis and prevent a major power crisis in the country.
Ruth Abla ADJORLOLO
