$1.47bn Energy Reset: Mahama Gov’t Clears Power Sector Debts, Restores Investor Confidence
Clears legacy debts, restores World Bank guarantees, and secures steady gas supply to end years of power sector instability
- Government settled energy sector obligations, including World Bank PRG, gas suppliers, and IPPs, averting sector collapse
- Full repayment of the World Bank guarantee and settlement of ENI and Vitol invoices reaffirmed Ghana’s credibility with international partners
- Renegotiated IPP contracts and increased gas production reduced reliance on expensive liquid fuels and improved electricity reliability
The Ministry of Finance has announced that the government has successfully resolved Ghana’s long-standing energy sector debt crisis, marking what it describes as a decisive turnaround for the country’s power industry and fiscal stability.
In a statement issued on Monday, January 12, the Ministry revealed that as of December 31, 2025, the John Dramani Mahama administration had paid a total of US$1.47 billion to stabilise and reset the energy sector.
According to the Ministry, when President Mahama assumed office in January 2025, the sector was on the brink of collapse after years of non-payment for gas supplied from the Offshore Cape Three Points (OCTP) field to power producers. The situation had completely exhausted the US$500 million World Bank Partial Risk Guarantee (PRG) put in place under the previous administration.
The PRG, established in 2015, was critical in unlocking nearly US$8 billion in private sector investment for the Sankofa Gas Project by guaranteeing payments to ENI and Vitol in the event of default.
The Ministry disclosed that government has now fully repaid US$597.15 million, including interest, drawn on the World Bank guarantee—restoring the facility in full and reaffirming Ghana’s credibility with international partners.
Between January and December 2025, all outstanding gas invoices owed to ENI and Vitol, amounting to about US$480 million, were also settled, bringing Ghana fully up to date with its obligations to the Sankofa partners.
Additionally, the government paid approximately US$393 million in legacy debts to Independent Power Producers (IPPs) in 2025, following the renegotiation of all IPP agreements to ensure better value for money.
Payments to IPPs included:
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Karpowership Ghana – US$120 million
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Cenpower Generation – US$59.4 million
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Sunon Asogli – US$54 million
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Early Power – US$42 million
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Twin City Energy (Amandi) – US$38 million
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AKSA Energy – US$30 million
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Cenit Energy – US$30 million
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BXC Company – US$10.56 million
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Meinergy Technology – US$8.82 million
The Ministry further noted that government has engaged upstream partners, including Tullow Oil and Jubilee Field partners, to agree on a payment roadmap that guarantees reliable gas supply, supports stable electricity generation, and drives industrial growth.
These engagements, it said, have already led to increased gas production, reducing Ghana’s dependence on costly liquid fuels.
Reassuring the public and industry players, the Finance Ministry stated that sufficient budgetary provisions have been made to ensure timely payments going forward, declaring emphatically that “the era of uncontrolled energy sector debt accumulation is over.”
