The Ghanaian government has confirmed it has fully cleared $1.47 billion in outstanding energy-sector debts, marking a major step toward restoring financial stability in a sector that has long strained the country’s public finances.
President John Mahama’s administration, which assumed office in January 2025, inherited a power sector weighed down by years of unpaid gas supply obligations from the Offshore Cape Three Points (OCTP) field.
These arrears had completely depleted a $500 million World Bank Partial Risk Guarantee, a key facility that underpinned nearly $8 billion in private investment tied to the Sankofa Gas Project.
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According to the government, the repayment of $597.15 million under the World Bank guarantee has reinstated the facility and reinforced Ghana’s standing as a dependable partner in international finance.
In addition, all outstanding invoices owed to Sankofa project partners ENI and Vitol—estimated at about $480 million—have now been settled, with officials assuring that improved budgeting and financial controls will support timely payments going forward.
The government has also engaged other upstream operators, including Tullow Oil and the Jubilee Field consortium, agreeing on a structured plan to fully pay for gas already supplied.
These actions are expected to stabilise electricity generation nationwide and reduce reliance on more expensive liquid fuels.
As part of a broader reset of the energy sector, the administration renegotiated all Independent Power Producer (IPP) agreements and cleared roughly $393 million in legacy IPP debts during 2025.
The Ministry of Finance said total energy-sector payments for the year amounted to $1.47 billion, underscoring a decisive push to restore order and sustainability to the sector.
Through stricter enforcement of the Cash Waterfall Mechanism by the Ministry of Energy, the government has largely stayed current on IPP invoices and pledged continued improvements in payment discipline.
Analysts say the clearance of accumulated debts is likely to strengthen investor confidence, lower operational risks, and support industrial expansion.
The Mahama administration has stressed that the era of unchecked energy-sector debt is over, signalling a renewed commitment to fiscal responsibility, reliable power supply, and stronger engagement with both local and international partners.
