Energy sector ‘bleeding’ from IPP deals – Analyst warns

Benjamin Nsiah, Executive Director of the Centre for Environmental and Sustainable Energy, has called for urgent changes to Ghana’s contracts with Independent Power Producers (IPPs). He warns that these contracts are financially unsustainable. They also contribute significantly to the country's energy sector debt.

Nsiah believes that renegotiating these contracts is essential. This is crucial if Ghana wants to address its energy sector financial crisis. His comments come as discussions continue on reducing the sector's growing debt. This debt has caused frequent power disruptions and strained government finances.

On June 7, 2025, Nsiah spoke on The Big Issue on Channel One TV. He emphasized the need for broad reforms in the energy sector. These reforms aim to tackle long-standing structural challenges.

He referenced the Ghana Energy Sector Recovery Programme Report as a vital resource. This report outlines important steps needed to stabilize and sustain the power industry. “We require total reform,” he stated, urging a review of recommendations in the report.

A major concern is how power purchase agreements with IPPs are structured. Many agreements focus on availability rather than actual power production. This means the government must pay for plants even when they aren't used.

Nsiah explained that this leads to significant costs. “We have to pay for them being idle,” he said. This situation costs over $400 million annually.

To address some debts in the energy sector, the government introduced a Ghc1 Fuel Levy on all petroleum products.