President John Dramani Mahama has reaffirmed his administration’s commitment to resolving the
financial challenges facing Ghana’s energy sector, with a particular focus on addressing the significant
indebtedness of the Electricity Company of Ghana (ECG).
Speaking at the 2025 African CEOs Forum Awards in Abidjan, President Mahama disclosed that the
energy sector he inherited at the start of his second term was saddled with approximately $2.5 billion in
outstanding debts owed to independent power producers and gas suppliers.
“The energy sector has been our foremost priority,” President Mahama stated. “We are actively
renegotiating the legacy debts and working to ring-fence them. We have outlined a number of strategies
and are confident that by the end of this year or early next year, substantial progress will be made.”
President Mahama acknowledged that inefficiencies in ECG’s operations, particularly in revenue
collection, remain a major obstacle. He cited technical and commercial losses estimated at nearly 40
percent, attributing these challenges to inefficiencies in the distribution system.
“To sustainably resolve the sector’s financial issues, we must take a holistic approach and address
problems across the entire value chain,” he said. “Revenue collection remains weak, and this has a direct
impact on the ability to pay upstream suppliers.”
To improve efficiency, the government is exploring the possibility of introducing private sector
participation in ECG’s downstream operations, specifically in billing and metering. The President
revealed that while interest from private investors has already been expressed, the government is taking a
measured approach.
A technical committee advising the government on the matter has presented three options for
consideration:
- Appointing a single national concessionaire to manage billing and metering operations across the
country. - Dividing the country into regional concession zones with multiple private operators.
- A third alternative is currently under review.
The committee’s report will be submitted to Cabinet for deliberation. Once a decision is made, we will
launch a formal call for expressions of interest,” President Mahama said. Crucially, he emphasized that any future partnerships must include Ghanaian participation. “There must be local ownership. Even if an international firm is selected, it will be required to partner with a Ghanaian
entity,” he stated.
The President also highlighted the reintroduction of the cash waterfall mechanism, a system designed to
ensure equitable distribution of ECG’s revenues to various stakeholders. Its previous abandonment had
contributed significantly to the build-up of arrears in the sector. “We have reinstated the cash waterfall mechanism and are enforcing its implementation. This is already yielding positive results, with regular monthly disbursements reaching key players in the value chain,” he noted.
President Mahama concluded by expressing optimism that the reforms underway will restore confidence
and financial stability in the power sector. “Our objective is to clean the slate and rebuild a resilient energy economy. By this time next year, we
believe our partners will see demonstrable progress and a firm commitment to resolving the debt
overhang,” he said