The government is targeting 100 per cent monthly payments to independent power producers (IPPs) as part of efforts to end the energy sector's long-standing debt cycle.
A stricter enforcement of the cash waterfall mechanism and improved financial discipline has enabled the government to pay some IPPs 80 to 90 per cent of their monthly invoices, with the ultimate goal of ensuring full and timely payments.
The Deputy Minister of Energy and Green Transition, Richard Gyan-Mensah, who announced this, explained that stronger revenue mobilisation by the utilities, particularly the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo), was improving the sector's financial position and reducing the risk of accumulating new arrears.
Speaking at the 2026 Annual General Meetings of the Association of Power Utilities of Africa (APUA) in Accra yesterday (July 28), the deputy minister said the government was implementing sweeping financial reforms to restore confidence in the power sector, improve liquidity and ensure the timely settlement of obligations to power producers.
“We have been more active on the cash waterfall mechanism, which is one of the reasons we keep saying that we are not going to go back to the system where we have high outstanding debts because we can pay IPPs now. Some IPPs are paid almost 80 to 90 per cent, and we are looking forward to a time where we can do 100 per cent for IPP payments monthly,” he said.
APUA
Ghana is hosting the 60th Annual General Meeting of the Association of Power Utilities of Africa (APUA) in Accra from July 27 to 31, 2026.
On the theme, "Accelerating Africa's electricity market integration: Advancing regulatory readiness, regional market development and strategic partnerships", the meeting is bringing together about 200 chief executive officers and energy experts from across the continent.
The event is being held under the patronage of the Ministry of Energy and Green Transition, in collaboration with the Volta River Authority (VRA), Bui Power Authority, Ghana Grid Company Limited (GRIDCo), the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo).
Financial reforms
Mr Gyan-Mensah, who represented his sector minister, stated that the renegotiation of some power purchase agreements had generated savings of more than $250 million, with negotiations on the remaining contracts still ongoing.
“We have done a renegotiation with the IPPs, where we have made some savings. On the face of it, we have more than $240 million, but that is just for the renegotiation amount, and we still have some to conclude,” he said.
He said that renewable energy tariffs had been reduced from about 18 US cents per kilowatt-hour to about 6.5 US cents, while thermal generation costs had fallen from between 13 and 15 US cents per kilowatt-hour to below 10 US cents.
He added that the cost reductions, together with stronger revenue collection by ECG and NEDCo, would help deliver more affordable electricity tariffs while ensuring the long-term financial sustainability of the power sector.
Regional collaboration
The Chief Executive Officer (CEO) of the VRA, Edward Ekow Obeng-Kenzo, stated that stronger regional collaboration and deeper electricity market integration were critical to achieving Africa's energy security and sustainable development goals.
Participants in the 2026 Annual General Meetings of the association
"Africa's energy future will improve when our utilities work together, our systems become better connected, and power moves more efficiently from areas of surplus to areas of need," he said.
He added that renewable energy and nuclear power should be pursued as complementary sources to strengthen grid stability, support industrialisation and accelerate the continent's transition to a reliable, affordable and low-carbon energy future.
Continental power market
The Director-General of the Association of Power Utilities of Africa (APUA), Abel Didier Tella, explained that African power utilities must strengthen collaboration and knowledge-sharing to accelerate the continent's energy transformation and achieve a single electricity market.
"The CEOs need to meet, interact and share experiences to be able to accelerate Africa in its transformation," he said.
He added that APUA would continue working with the African Union and other regional partners to advance the vision of "one grid, one market and one Africa" through stronger cross-border electricity trade and sustained power sector reforms.
