The Executive Director of the Centre for Environmental and Sustainable Energy, Benjamin Nsiah, has called for an urgent review of Ghana’s existing contracts with Independent Power Producers (IPPs), warning that the current arrangements are financially unsustainable and contribute significantly to the country’s energy sector debt.
Nsiah argued that if Ghana is serious about solving the financial crisis in the energy sector, revisiting and renegotiating these contracts must be a priority.
His comments come amid ongoing national discussions on how to reduce the energy sector’s mounting debt, which has led to frequent power disruptions and constrained government finances.
Speaking on The Big Issue on Channel One TV on Saturday, June 7, 2025, Nsiah stressed the need for broad energy sector reforms to address long-standing structural challenges.
He pointed to the Ghana Energy Sector Recovery Programme Report as a key resource that outlines critical steps the country must take to stabilise and sustain its power industry.
“For us to sustain the sector, we require a total reform, one of which is for us to revisit the Ghana Energy Sector Recovery Programme Report and look at some recommendations in there,” he said.
A major concern, according to Nsiah, is the structure of power purchase agreements signed with IPPs, many of which are based on availability rather than actual power production.
He explained that this means the government is obligated to pay for power plants even when they are not in use.
“We need to look at some of the contracts we have with the IPPs. This is because we have those contracts based on availability and not based on production,” he explained.
“Anytime some of them are even idle, we have to pay for them being idle. That costs us huge sums of money, in excess of $400 million annually.”
On the part of the government, it has introduced a Ghc1 Fuel Levy on all petroleum products as an avenue to generate funds to clear off some debts in the energy sector.
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