The Finance Minister, Dr. Cassiel Ato Forson, has revealed that Ghana’s energy sector financing shortfall is expected to surge to approximately GH¢35 billion in 2025, despite significant expenditure aimed at addressing the sector's financial gap in 2024.
Presenting the 2025 Budget Statement and Economic Policy on the floor of Parliament on Tuesday, Dr. Forson highlighted the alarming state of the energy sector’s finances, stressing that the shortfall for the period between 2023 and 2026 has been projected at about GH¢140 billion.
“Mr. Speaker, a recent exercise conducted by the energy sector financing modelling team under the Energy Sector Recovery Programme (ESRP) revealed that the Business as Usual (BAU) energy sector financing shortfall has increased significantly to about GH¢35 billion for 2025, even after the rather large spending for the sector’s shortfall in 2024,” Dr. Forson stated.
He noted that the estimated GH¢140 billion financing gap over the next three years is more than 20 times the allocation for Goods and Services for all Ministries, Departments, and Agencies (MDAs) for 2025.
Dr. Forson further disclosed that beyond the projected shortfall, the government is also grappling with significant unpaid legacy arrears owed to Independent Power Producers (IPPs).
“The legacy arrears, which stood at US$1.73 billion at the end of 2024, remain a major financial burden on the sector,” he added.
The Finance Minister underscored the urgent need for structural reforms and innovative financing strategies to stabilize the energy sector and prevent further financial deterioration.
Story by: Joshua Kwabena Smith
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