Gov’t cuts debt to power producers by 20% in restructuring deal
By Praisebell Rosemond Larbi
The government has achieved a significant breakthrough in its negotiations with Independent Power Producers (IPPs), reducing the country’s outstanding debt to the power producers by 20 per cent.
The debt, which initially stood at around USD1.5 billion, has now been brought down to approximately USD1.2 billion following a debt restructuring agreement.
This development was disclosed by Mr Ben Boakye, a member of the board mediating the negotiations, during his remarks at the Future of Energy Conference organised by the Africa Centre for Energy Policy (ACEP) on Tuesday, 26 August 2025.
According to Mr Boakye, the agreement with the IPPs has created room for government to save about USD300 million on existing debt obligations, in addition to projected savings of more than USD1 billion on future payments.
He described the restructuring as a major step toward cleaning up the energy sector and ensuring fiscal sustainability.
“It’s work in progress, and we appreciate government’s effort to engage multiple stakeholders to find solutions to the problems of the energy sector,” Mr Boakye noted.
He stressed that the IPPs had shown goodwill throughout the negotiations, making concessions that paved the way for the current savings.
“I must say that the IPPs have been very magnanimous to give us some haircut. We are looking to save about USD300 million on the debt and also over a billion dollars on future payments. At this point, we are close to USD200 million, I suppose,” he indicated.
Beyond the immediate financial relief, the restructuring deal introduces a more sustainable repayment framework. Mr Boakye explained that the agreement extends the repayment period over an average of four to five years.
This approach, he said, would free up fiscal space for government to channel resources into other pressing development needs while gradually paying off the obligations owed to the power producers.
“What we have done so far is to agree with many of the IPPs on a structure of payment spread over four to five years to amortise the debt and, in return, secure additional concessions from them,” Mr Boakye added.
The government’s arrears to IPPs have long been a source of strain in the energy sector, contributing to liquidity challenges and operational bottlenecks in electricity supply.
