Domestic banks possess sufficient financial capacity to fund major energy sector projects if Ghana addresses transparency concerns, governance weaknesses and establishes credible cash flow systems, a senior banking executive has stated.
Maxwell Asare, Director of Multinational and Local Corporate at Fidelity Bank, told the 14th Ghana Economic Forum (GEF) in Accra that while financial institutions can support large-scale energy investments, securing new funding depends largely on clearing existing legacy debts and establishing robust frameworks for revenue management and repayment.
He proposed that existing debts be structured into a special purpose vehicle (SPV) to issue bonds, which could be listed on the stock exchange to immediately settle those obligations. According to Asare, the financial sector has sufficient capacity, especially when supported by guarantees from development finance institutions (DFIs), to finance energy projects.
However, he emphasized that no financial institution will commit funds without transparency, credibility of cash flow and good corporate governance. Asare further cautioned that frequent policy inconsistencies and loan defaults following political transitions have weakened investor confidence.
He stressed that Fidelity Bank stands ready and willing to invest in the energy sector, but only when these fundamental conditions are met. The executive also proposed that government should consider using an SPV model to separate historical debts from operational revenues, allowing tariffs and taxes to flow directly into production and distribution rather than servicing old obligations.
The forum, held under the theme “Currency stability: A reset for sustainable economic growth,” brought together policymakers and stakeholders to examine how Ghana can achieve lasting economic stability through structural reforms in finance, energy and agribusiness.
Other panellists at the session, held under the theme “Financing the Future: Tackling Legacy Debt and Building a Resilient Energy Economy,” echoed the call for transparency and fiscal discipline in managing energy sector finances.
Reindolf Annor, Partner at KPMG Ghana, advocated the implementation of high-impact, low-cost measures to tackle the debt burden. He also criticized inconsistent application of the Energy Sector Levies Act, 2015 (Act 899), noting that revenues meant to retire sector debts have not been used for their intended purpose.
Annor stated that accountability for the funds collected must be prioritized, and the performance of sector entities must be monitored to build trust with financiers. He questioned how much has been collected from energy levies and how much has been used to reduce sector debt, arguing that such accountability will build credibility.
Minister for Energy and Green Transition, John Abdulai Jinapor, recently revealed that Ghana’s energy sector debt has reached GH₵80 billion, with the Electricity Company of Ghana (ECG) accounting for more than GH₵60 billion. Finance Minister Dr. Cassiel Ato Forson has also warned that this figure could rise to GH₵126 billion by 2027 if urgent reforms are not implemented.
Benjamin Boakye, Executive Director at Africa Centre for Energy Policy (ACEP), disclosed that government is projected to spend about GH₵30 billion on power subsidies in the medium term, an amount comparable to expenditure on key social infrastructure projects such as schools and hospitals. He described this as unsustainable, warning that failure to address the sector’s inefficiencies will continue to divert resources away from critical developmental priorities.
Dr. Ishmael Ackah, Technical Advisor at the Ministry of Energy and Green Transition, highlighted systemic failures and weak oversight as root causes of the current power challenges and legacy debt. He noted that in 2006 the Energy Commission developed a strategic national energy plan but it was never implemented.
Ackah identified several factors needing immediate attention, including non-cost-reflective tariffs despite being among West Africa’s highest, inefficiencies ranging from unmetered streetlights to widespread power theft, and unbudgeted subsidies for specific industries that amounted to over $190 million in 2021 alone.
However, Ackah outlined ongoing government efforts including renegotiating Independent Power Producer contracts, which has secured a $261 million discount on legacy debts, and the recent passage of a Legislative Instrument mandating competitive procurement for power generation.
He also highlighted improved revenue collection by the Electricity Company of Ghana, which has risen from an average of GH₵800 million monthly to GH₵1.5 billion. However, Annor called for transparency, saying the increase in revenue can be attributed to tariff hikes rather than supposed efficiency.
Dr. Elikplim Apetorgbor, Chief Executive Officer of Independent Power Producers, refuted claims that IPPs are expensive, arguing that they offer greater operational efficiency and sustained value to Ghana’s power industry. He dismissed such assertions as technically inaccurate, arguing that many state-owned plants are almost at the end of their lifespan and have already recovered their capital costs, while most IPPs are newer and still recovering their investments in addition to energy charges.
Kwaku Wiafe, Head of Engineering Unit at Volta River Authority (VRA), made a case for government investing in nuclear energy so it becomes the baseload complement to hydro and gas-powered plants. He revealed that countries are giving tariffs for nuclear from $0.29 for plants that are already paid for to about six cents for new plants, presenting it as a viable, long-term solution for affordable, stable power.
The Ghana Economic Forum 2025, organized by Business & Financial Times, was sponsored by Fidelity Bank and KPMG and brought together technocrats, policymakers and stakeholders to explore solutions for Ghana’s economic challenges.
