The Electricity Company of Ghana is expected to be taken over by a private sector player going forward, the International Monetary Fund (IMF) has revealed.
In its Staff Report on Ghana, the Bretton Woods institution stated that “by the end of 2025, a transaction advisor is expected to be hired to oversee the selection process for private sector concessionaires for electricity distribution”.
It added that the energy sector is stabilizing, highlighting that the Electricity Company of Ghana’s (ECG) payments to independent power producers (IPPs) through the cash waterfall mechanism have increased significantly, reaching US$308 million in the first half of 2025, compared with US$325 million for 2024 in total.
“At end-June 2025, the stock of net payables to IPPs stood at US$1.2 billion, US$71 million higher than at the end of 2024; a further US$830 million was owed to fuel suppliers, US$124 million lower over the same period”.
It pointed out that the increase in payables to IPPs in first-half of 2025 was largely driven by significantly lower direct government payments to IPPs relative to the previous two years, which more than offset significantly higher ECG payments.
Government, IPPs Agree to Restructure Legacy Debt
The Fund statement continued that the government and IPPs have agreed to restructure their legacy debt.
“In 2025Q3 [quarter 3 2025], the government agreed with nine IPPs—representing virtually all net payables at end-June—on a comprehensive payment plan for legacy arrears accumulated up to end-June 2025, including substantial haircuts (15 to 30%), significant upfront payments (around US$300 million in 2025, between 10 to 100% of each IPPs’ post-haircut payables), and biannual payments for the remainder between 2026 and 2029”.
The IPPs also agreed to revised power purchasing agreements (PPAs), which will lower electricity costs going forward. These agreements were adopted by Parliament in November 2025. They supersede previous agreements that were abandoned after the government failed to make payments in 2024.
Separately, the Fund said the government intends to eliminate, by April 2026, its arrears with Sankofa, the largest gas supplier representing more than half of total arrears to fuel suppliers.
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