The Minister of Finance, Ken Ofori-Atta, during the Mid-year budget review in Parliament, disclosed that the government is actively engaging with the Independent Power Producers (IPPs) to tackle the issue of debt relief in the energy sector.
He emphasized the significance of resolving the challenge posed by IPP power payments, which has been affecting the economy.
To address the impact of excess capacity on the economy, the government is working in collaboration with IPPs.
One of the measures taken is restructuring the accrued outstanding balances and clearing arrears in the sector.
Moreover, efforts have been made to reduce excess capacity commitments by renegotiating the Gas Sales Agreement between the Volta River Authority (VRA) and N-Gas.
In the realm of alternative energy, the government is making progress towards establishing Ghana’s first nuclear power plant.
Vendor companies and countries have been shortlisted for this development, and the goal is to identify an economically resilient nuclear power technology that will serve as a clean energy source for the nation.
To alleviate the financial burden on the energy sector and ensure sustainable revenue collection, Mr. Ofori-Atta called for a collective effort to assist the Electricity Company of Ghana in its revenue collection exercise.
The implementation of the Cash Waterfall Mechanism (CWM) and Natural Gas clearing has contributed to the equitable distribution of revenues in the sector.
Looking ahead, the Minister emphasized the ongoing reforms of the CWM to ensure mandatory compliance, which will facilitate consistent cash flow to the IPPs and promote the stability of the energy sector.