The Government of Ghana has cleared outstanding energy-sector debts amounting to $1.470 billion in the 2025 fiscal year, a move that has effectively rescued the sector from collapse and restored confidence among investors and international partners. The energy sector debt clearance, led by the Ministry of Finance under the John Dramani Mahama administration, addressed long-standing arrears owed to gas suppliers, Independent Power Producers (IPPs), and the World Bank, marking a significant milestone in Ghana’s power sector recovery.
Breakdown of the $1.47 Billion Energy Sector Payments
The debt clearance covered key areas across the energy value chain and was executed through coordinated fiscal and policy actions.
Key payments include:
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$597.15 million (inclusive of interest) to fully restore the depleted World Bank Partial Risk Guarantee (PRG) for the Sankofa Gas Project.
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$480 million paid between January and February 2025 to settle outstanding gas invoices owed to ENI and Vitol for natural gas supplied from the Sankofa Field.
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$393 million paid to clear inherited debts owed to Independent Power Producers (IPPs).
These payments have ensured that Ghana is current on its obligations to Sankofa partners and IPPs, stabilising electricity generation nationwide.
Restoration of the World Bank Partial Risk Guarantee
When President Mahama assumed office in January 2025, the World Bank PRG—originally valued at $500 million—had been fully depleted due to years of non-payment under the previous administration. The guarantee, established in 2015, was critical in attracting nearly $8 billion in private-sector investment into Ghana’s energy sector.
By repaying $597.15 million, including interest, the government has fully restored the guarantee, reinstated World Bank risk coverage, and reaffirmed Ghana’s credibility on the global financial stage.
Independent Power Producers (IPPs) Debt Settlement
As part of the energy sector reset, the government cleared all legacy debts owed to IPPs. Major beneficiaries include:
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Karpower Ghana Company Ltd – $120 million
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Cenpower – $59.44 million
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Sunon Asogli – $54 million
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Early Power Ltd – $42 million
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Twin City Energy (Amandi) – $37.98 million
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AKSA Energy Ltd – $30 million
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Cenit Energy Ltd – $30 million
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BXC Company Ltd – $10.56 million
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Meinergy Technology – $8.82 million
Additionally, all IPP agreements have been renegotiated to secure better value for money for the Ghanaian people.
Official Remarks
“Altogether, the Ministry of Finance has paid approximately $1.470 billion in the 2025 fiscal year to rescue and restore Ghana’s energy sector,” a Ministry of Finance source told the Daily Graphic.
The source further emphasised that the government remains current on most IPP invoices for 2025 through the disciplined implementation of the Cash Waterfall Mechanism.
Background: Why the Debt Clearance Matters
Years of persistent non-payment for gas supplied from the Offshore Cape Three Points (OCTP) field had pushed Ghana’s energy sector to the brink of collapse. The depletion of the World Bank PRG posed one of the gravest risks to national financial stability and electricity reliability. The 2025 debt clearance has decisively resolved this risk.
Frequently Asked Questions (FAQs)
Why was the World Bank Guarantee important?
It served as an insurance mechanism guaranteeing payments to ENI and Vitol, enabling large-scale private investment in Ghana’s energy sector.
Has Ghana fully cleared its energy debts?
Yes, all inherited arrears have been cleared, and the government remains current on most 2025 obligations.
Will energy sector debt accumulate again?
According to the Ministry of Finance, “the era of uncontrolled energy sector debt accumulation is over.”
