John Jinapor cautions Energy Sector challenges if immediate measures not implemented


The Energy Minister, John Abdulai Jinapor has cautioned that Ghana's energy sector may face significant challenges if immediate measures are not taken.


His remarks come in response to ongoing power supply issues in various regions of the country.


During a meeting with Civil Society Organizations (CSOs) focused on the energy sector, Mr, Jinapor shared his vision, key priorities, and suggested solutions to tackle the existing problems.


He emphasized that both the petroleum and power sectors are at a crucial point, highlighting financial struggles and the sector's heavy dependence on independent power producers (IPPs).


A growing financial burden


The core of the energy crisis lies in the financial instability of the Electricity Company of Ghana (ECG) and other related agencies.


He painted a grim picture of the situation, stating, “ECG has liabilities amounting to 68 billion cedis, while their receivables stand at only 8 billion. Even if they collected all their dues today, they would still owe around 60 billion.”


The total liabilities of the energy sector, which include obligations from the Ministry of Energy and other entities, are estimated to reach GHC 80 billion.


In addition to these longstanding debts, he  raised concerns about new debts arising from ECG's failure to fulfill its payment commitments to IPPs.


“Zoka Power contacted me yesterday, threatening to shut down their plant,” he disclosed.


“Their monthly bill is $22 million, but ECG can only manage to pay $7 million. Over ten months, that results in a $150 million deficit. In four years, that could exceed $600 million. This situation is unsustainable,” he noted.


Tariff hikes and economic challenges


To stabilize the sector, the International Monetary Fund (IMF) has suggested a 48% increase in electricity tariffs. However, Jinapor recognized the challenges of implementing such a steep increase.


“How can we possibly raise tariffs by 48% all at once in September? It’s a tough situation,” he remarked.

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