Ghana’s energy sector shortfall is projected to balloon to US$1.10 billion in 2026, despite marked improvements, the International Monetary Fund (IMF) has warned.
During the review period, the shortfall was over US$500 million, as assumed by the government through legacy debt payments or fuel purchases.
“The smaller budgeted shortfall is justified by the 2025 outturn, as well as the expected reduction in power generation costs from renegotiated PPAs and projected decreased reliance on costly liquid fuels,” the IMF said in its Staff Report on Ghana.
The IMF projects an energy sector shortfall of US$1.103 billion in 2026, comprising a US$925 million power sector shortfall and US$178 million gas sector shortfall. Revenue to be collected is projected at US$2.607 billion, whilst generation costs are estimated at US$3.53 billion.
“The government and IPPs have agreed to restructure their legacy debt,” the IMF noted. “In 2025’s Q3, the government agreed with nine IPPs on a comprehensive payment plan for legacy arrears accumulated up to end-June 2025, including substantial haircuts (15 to 30%), significant upfront payments (around $300 million in 2025), and biannual payments for the remainder between 2026 and 2029.”
The IMF also revealed plans to privatise the Electricity Company of Ghana (ECG), stating that “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.”
ECG’s payments to independent power producers (IPPs) have increased significantly, reaching $308 million in the first half of 2025, compared with $325 million for 2024 in total. The IMF urged more action to restore ECG to financial sustainability and reduce fiscal risks in the sector.
By Adnan Adams Mohammed
