Ghana’s Government has announced its intention to significantly reduce the country’s $2.5bn (31.27bn cedis) debt owed to independent power producers and gas suppliers by the end of the year, according to a Reuters report.

President John Dramani Mahama expressed confidence in addressing the financial challenges facing the power sector during a forum in Ivory Coast.

Last year, Ghana reached a restructuring agreement with independent power producers to manage approximately $1bn of legacy debt.

Despite this, the nation’s arrears have continued to impact the economy, particularly since President Mahama began his second term in January.

President Mahama acknowledged inefficiencies within the state-owned utility, Electricity Company of Ghana (ECG), which faces a revenue collection loss of around 40%.

To improve the situation, he announced plans to involve the private sector in the billing process.

Mahama was quoted as saying: “People are queuing up, I said they should wait. We are going to do expressions of interest,” indicating a cautious approach to selecting private partners for this initiative.

The cabinet is yet to decide on the structure of this partnership, which may involve one or multiple entities, with an emphasis on local participation.

President Mahama also encouraged companies to expedite oil and gas extraction, citing the global energy transition.

“Oil is in transition and so everybody who has any assets should be pumping like there is no tomorrow… I would lay a red carpet to anybody who wants to drill and pump oil to do so,” he added.

In related news, the Mission 300 initiative, which aims to electrify 300 million Africans by 2030, secured more than $8bn in new funding commitments during the Africa Energy Summit in Dar es Salaam, Tanzania.