Ghana’s energy sector is facing an escalating crisis as Energy and Green Transition Minister John Abdulai Jinapor disclosed that Ghana Water Limited has failed to pay the Electricity Company of Ghana (ECG) for electricity consumed over the past seven months, leading to a staggering GH₵1 billion in debt.

The revelation was made during a high-stakes meeting with Parliament’s Energy Committee and major power sector stakeholders on Thursday, May 15, as the Minister highlighted growing financial stress threatening the stability of electricity generation and supply nationwide.

“Ghana Water hasn’t paid even GH₵1 for seven months, and it has compounded to GH₵1 billion,” Jinapor stated. “The power sector will not be stable if such debts continue. The private sector or ordinary citizens alone cannot shoulder this burden.”

The Minister's comments came in response to complaints from Ghana Water Limited about erratic electricity supply affecting water distribution, a development that has disrupted essential public services in parts of the country.

Shutdown Threat from Karpower

In a related but even more alarming development, Jinapor revealed that Independent Power Producer Karpower has officially notified the government of plans to shut down operations effective May 18, citing over $400 million in unpaid arrears. The company is one of Ghana’s key power suppliers.

“Karpower has just sent us a letter that by the 18th, they will shut down the plant because we owe them more than $400 million,” the Minister revealed. “In total, we owe IPPs about $1.7 billion.”

The shutdown of Karpower would significantly reduce available power on the national grid, potentially plunging parts of the country into intensified power outages.

Liquidity Crisis Looms

Ghana’s energy sector is currently in the grips of a deepening liquidity crisis, driven by ballooning government arrears, underreported revenues, and delays in implementing cost-reflective tariffs. The lack of consistent payment by state institutions, including Ghana Water Limited, is further compounding the issue.

Minister Jinapor underscored the urgency of implementing strict revenue recovery measures. He has directed ECG to urgently pursue the GH₵1 billion owed by Ghana Water Limited, warning that failure to act decisively will worsen the sector’s instability.

“The entire value chain is under threat,” Jinapor warned. “We must act quickly to improve revenue collection and restructure our financial commitments, or risk a total collapse of power supply services.”