The International Monetary Fund (IMF) has revealed that the Electricity Company of Ghana (ECG) accumulated about US$3.5 billion in unpaid obligations during 2025, underscoring the deep financial difficulties facing Ghana’s energy sector.
According to the IMF’s latest Selected Issues Paper, ECG’s outstanding arrears reached their highest level of US$3.5 billion in the middle of 2025.
However, the debt reduced to approximately US$2.8 billion by the end of the year following government-led reforms aimed at improving the company’s financial position.
The report attributed ECG’s financial challenges to poor revenue collection, significant electricity distribution losses and a mismatch between the actual cost of supplying power and the tariffs paid by consumers.
Although ECG is able to collect around 86 percent of the revenue from electricity bills, the IMF noted that weaknesses in the payment system continue to limit the company’s ability to meet its financial obligations.
As a result, payments to independent power producers (IPPs), fuel suppliers and other stakeholders in the energy value chain have often been delayed, leading to a growing accumulation of debt.
To prevent disruptions in electricity supply, the government reportedly injected about US$2 billion into the sector in 2025. The funds were used largely to settle debts owed to gas suppliers and independent power producers, helping to maintain power generation.
The IMF also identified high distribution losses as one of the sector’s biggest structural problems. Technical and commercial losses at ECG stood at 27.1 percent in 2024, while losses recorded by the Northern Electricity Distribution Company (NEDCo) were even higher at 31.3 percent.
According to the Fund, these inefficiencies continue to weaken the financial health of electricity distributors and pose a risk to reliable power supply for households, businesses and industries.
It warned that the challenges go beyond accounting issues, as persistent financial instability could slow economic growth and affect productivity.
To address the situation, the IMF recommended stronger revenue mobilisation, improved management of distribution losses and greater private sector participation in ECG’s distribution operations.
It stressed that the proposal is intended to improve efficiency rather than privatise the company.
The Fund further urged the government to strengthen the Cash Waterfall Mechanism, implement regular electricity tariff reviews and publish audited financial statements of energy sector institutions.
