The Africa Centre for Energy Policy (ACEP) has expressed concerns about the ongoing accumulation of substantial debt within Ghana’s energy sector, highlighting that the country is accumulating approximately $67 million each month in unpaid obligations.
This rising debt, according to ACEP, is largely a result of the low revenue recovery rate of the Electricity Company of Ghana (ECG), which it says currently stands at a worrying 57 percent.
Kodzo Yaotse, the Policy Lead for Petroleum and Conventional Energy at ACEP noted that improving the revenue collection rate of ECG should be treated as a critical priority by both the government and the ECG itself.
Mr. Yaotse warned that the failure to collect these revenues will not only exacerbate the current debt situation but will also further deepen the financial troubles of the Independent Power Producers (IPPs) who are owed large sums as part of Ghana’s legacy energy debt.
“ECG is making 43 percent [revenue] collection rate. That means there is some 57 percent that is not collected that must be paid and that translates into some $67 million every month, which if not paid, would only go up to add to what is already owed to the IPPs in terms of legacy debt. So we have to find a way to be able to ensure that there is optimal revenue collection.”