Mahama Government Clears $1.47 Billion Energy Debt in First Year
Minister of Finance, Cassiel Ato Baah Forson
By V. L. K. Djokoto
ACCRA — The Government of Ghana has paid approximately US$1.470 billion to clear crippling energy sector debts inherited from the previous administration, the Ministry of Finance announced, marking what officials describe as a decisive turnaround in the sector's financial stability.
The payments, made throughout 2025, include the full restoration of a depleted World Bank guarantee, settlement of gas supplier arrears, and clearance of legacy debts owed to independent power producers.
World Bank Guarantee Fully Restored
At the heart of the government's intervention was the repayment of US$597.15 million, including interest, to restore the World Bank Partial Risk Guarantee that had been exhausted under the previous administration. The guarantee, originally established in 2015, was designed to underwrite nearly US$8 billion in private investment into Ghana's energy sector through the Sankofa Gas Project.
“Its exhaustion represented a serious governance failure that undermined Ghana's international credibility,” the Finance Ministry stated in its announcement.
The guarantee serves as a critical safeguard for payments to project partners ENI and Vitol when payment shortfalls occur. Its restoration, completed by December 31, 2025, has been hailed as a significant step in rebuilding Ghana's reputation among international partners.
Gas Suppliers Brought Current
Between January and December 2025, the government settled all outstanding gas invoices owed to ENI and Vitol for electricity generation, totaling approximately US$480 million. Officials say Ghana is now fully current on its obligations to the Sankofa partners.
The administration has also engaged Tullow Oil and the Jubilee Field partners on a comprehensive payment roadmap for gas supplies, aimed at supporting reliable nationwide electricity generation while accelerating industrial growth.
According to the Finance Ministry, engagements with upstream partners have already resulted in increased domestic gas production, part of a broader strategy to reduce reliance on expensive liquid fuels.
Independent Power Producers Receive $393 Million
Legacy debts to independent power producers totaling US$393 million were also cleared in 2025, with Karpowership Ghana receiving the largest payment of US$120 million. Other major beneficiaries included Sunon Asogli Ghana Ltd (US$54 million), Cenpower Generation (US$59.4 million), and Early Power Ltd (US$42 million).
The full breakdown includes payments to nine IPPs:
Karpowership Ghana Co. Ltd – US$120 million
Cenpower Generation Co. Ltd – US$59.4 million
Sunon Asogli Ghana Ltd – US$54 million
Early Power Ltd – US$42 million
Twin City Energy (Amandi) – US$38 million
AKSA Energy Limited – US$30 million
Cenit Energy Ltd – US$30 million
BXC Company Ltd – US$10.6 million
Meinergy Technology – US$8.8 million
The government says it has successfully renegotiated all IPP agreements to secure improved value for money and has remained current on largely all IPP invoices for 2025 through disciplined implementation of the Cash Waterfall Mechanism by the Ministry of Energy.
End of Debt Accumulation Era
“The Government of Ghana assures the general public, industry stakeholders, and international partners that the era of uncontrolled energy sector debt accumulation is over,” the Finance Ministry declared.
Officials say adequate budgetary provisions have been secured to sustain timely payments going forward, signaling confidence in the sector's long-term financial sustainability under the new administration.