The John Dramani Mahama led National Democratic Congress (NDC) administration inherited a severely distressed energy sector with over $1.5 billion annual financing shortfall, Finance Minister Dr Cassiel Ato Baah Forson has disclosed.
Dr. Ato Forson who disclosed this when on the floor of Parliament on Thursday July 24, during a presentation of the 2025 Mid-Year Budget Statement to Parliamenpainted a dire picture of the energy sector at the time the new government took office, describing it as “bleeding” due to persistent financial gaps and structural inefficiencies.
He noted that the energy sector debt has posed a significant risk to the economy since 2023.
“We inherited a bleeding energy sector with annual financing shortfalls in excess of $1.5 billion,” he said.
He explained that the shortfalls were driven by a combination of factors, including legacy debts, poorly structured Power Purchase Agreements (PPAs), inefficiencies in revenue collection, and high operational costs across the power value chain.
According to Dr. Ato Forson, these challenges not only strained the national budget but also posed significant risks to the country’s energy security and economic recovery efforts.
The Minister noted that the government has since initiated reforms aimed at addressing these structural challenges, improving transparency, and restoring financial stability within the sector.
These measures include the renegotiation of PPAs, reduction of excess capacity charges, and a review of sector governance.
He assured Parliament that the Mahama government remains committed to transforming the energy sector into a sustainable and efficient pillar of national development.
