ECG to Be Privatised – IMF Reveals in Staff Report
The Electricity Company of Ghana (ECG) is set to be taken over by a private sector operator as part of ongoing reforms in the energy sector, according to the International Monetary Fund (IMF).
In its latest Staff Report on Ghana, the Bretton Woods institution disclosed that government plans to engage a transaction advisor by the end of 2025 to oversee the selection of a private sector concessionaire to manage electricity distribution in the country.
“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,” the IMF stated.
The Fund noted that the energy sector is showing signs of stabilisation, pointing to improvements in cash flow and payment discipline. It revealed that the Electricity Company of Ghana’s payments to Independent Power Producers (IPPs) through the cash waterfall mechanism rose significantly in the first half of 2025.
According to the report, ECG paid US$308 million to IPPs between January and June 2025, compared with total payments of US$325 million for the whole of 2024.
However, despite the improved payment performance, outstanding liabilities remain substantial. As of end-June 2025, net payables to IPPs stood at US$1.2 billion, representing an increase of US$71 million from end-2024 levels. In addition, arrears owed to fuel suppliers amounted to US$830 million, though this represented a decline of US$124 million over the same period.
The IMF explained that the rise in outstanding payables to IPPs in the first half of 2025 was largely due to significantly lower direct government payments, which outweighed the improvement in ECG’s own payments under the cash waterfall mechanism.
Government, IPPs Agree to Restructure Legacy Debt
The Fund further disclosed that the government and Independent Power Producers have reached an agreement to restructure legacy debts accumulated over the years.
“In the third quarter of 2025, the government agreed with nine IPPs, representing virtually all net payables as of end-June on a comprehensive payment plan for legacy arrears accumulated up to end-June 2025,” the report stated.
Under the agreement, IPPs accepted haircuts ranging between 15% and 30%, alongside significant upfront payments estimated at about US$300 million in 2025. These upfront payments represent between 10% and 100% of each IPP’s post-haircut outstanding balance, with the remaining amounts to be settled through biannual payments from 2026 to 2029.
The IMF added that the IPPs have also agreed to revised Power Purchase Agreements (PPAs) aimed at reducing electricity costs over the medium term. These revised agreements were approved by Parliament in November 2025, replacing earlier PPAs that collapsed after government payment defaults in 2024.
Separately, the Fund noted that government plans to fully clear arrears owed to Sankofa, the country’s largest gas supplier, accounting for more than half of total fuel supply arrears by April 2026.
The IMF said these measures are expected to improve the financial sustainability of the energy sector, reduce fiscal risks, and support Ghana’s broader economic recovery program.
