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The Government of Ghana, under the leadership of President John Dramani Mahama, has cleared a total of US$1.470 billion in energy sector debts within its first year in office, a move aimed at restoring stability and confidence in the sector.
When President Mahama assumed office in January 2025, the energy sector was burdened by accumulated arrears, including unpaid gas supply obligations from the Offshore Cape Three Points (OCTP) field. This situation had led to the complete depletion of the US$500 million World Bank Partial Risk Guarantee (PRG) under the previous administration, posing a significant risk to Ghana’s financial credibility.
The PRG, established in 2015 under a previous NDC government, was a key instrument that supported nearly US$8 billion in private sector investment through the Sankofa Gas Project. Its exhaustion had raised concerns among international partners and investors.
As part of efforts to reverse the situation, government had, by 31 December 2025, fully repaid US$597.15 million, including interest, drawn on the World Bank Guarantee. This repayment has restored the facility in full and reaffirmed Ghana’s position as a reliable partner in international finance.
Additionally, between January and December 2025, government settled all outstanding gas invoices owed to ENI and Vitol, amounting to approximately US$480 million, ensuring the country is fully up to date on its gas payment obligations. Adequate budgetary provisions have also been made to sustain timely payments going forward.
Government has further engaged upstream partners, including Tullow Oil and Jubilee Field partners, agreeing on a roadmap to guarantee full payment for gas supplied, a move expected to support reliable power generation and industrial growth. These engagements have already resulted in increased gas production and reduced reliance on expensive liquid fuels.
In 2025 alone, government paid about US$393 million in legacy debts owed to Independent Power Producers (IPPs), following the renegotiation of IPP agreements to secure better value for money. Major payments included US$120 million to Karpowership, US$59.4 million to Cenpower, US$54 million to Sunon Asogli, and US$42 million to Early Power, among others.
Beyond clearing inherited arrears, the Mahama Administration says the disciplined implementation of the Cash Waterfall Mechanism has ensured that government remains largely current on IPP invoices for 2025, with commitments to further improve payment performance.
Government has assured the public, industry stakeholders, and international partners that the era of uncontrolled energy sector debt accumulation is over.
