The Government of Ghana, led by President John Dramani Mahama, has achieved a significant recovery in the energy sector by clearing approximately US$1.470 billion in arrears within its first year in office.
This decisive action has restored confidence among international partners and helped end years of crippling debt that threatened the country’s financial and energy stability.
Resolving crisis inherited in 2025
When President Mahama assumed office in January 2025, the energy sector was in one of its deepest financial crises in recent memory. Prolonged non-payment for gas supplied from the Offshore Cape Three Points (OCTP) field had completely depleted the US$500 million World Bank Partial Risk Guarantee (PRG)—a facility designed to ensure payment security, attract investment, and stabilise power supply.
The PRG, established in 2015 under a previous NDC administration, had been essential in mobilising nearly US$8 billion in private sector investment through the Sankofa Gas Project. Its total depletion was widely regarded as a major governance failure under the preceding government, severely undermining Ghana’s international credibility.
Restoring the World Bank guarantee
In a significant fiscal milestone, the Mahama Administration announced that by 31 December 2025, Ghana had fully repaid US$597.15 million—including interest—drawn from the World Bank Guarantee. This repayment restores the PRG to its full value and re-establishes Ghana as a reliable partner to global investors and multilateral institutions.
Clearing gas supply arrears
Throughout 2025, the government also paid off all outstanding gas supply invoices owed to ENI and Vitol for electricity generation. These payments—totalling roughly US$480 million—brought Ghana fully current on its obligations to the Sankofa partners.
Officials indicate that robust budgetary measures have now been put in place to guarantee timely future payments, preventing the re-emergence of arrears that previously destabilised the sector.
Rebuilding relations with upstream partners
The administration further engaged Tullow Oil and the Jubilee Field partners, establishing a roadmap to ensure full and timely payments for all gas produced. This renewed partnership is expected to enhance consistent nationwide power generation and support industrial growth.
Recent discussions have already led to increased gas output, aligning with the government’s strategy to expand domestic gas supply and reduce dependence on costly liquid fuels.
Renegotiating IPP contracts and paying down legacy debts
As part of broader energy-sector reforms, the Mahama Administration renegotiated all Independent Power Producer (IPP) agreements to secure better value for Ghana.
In 2025 alone, the government paid approximately US$393 million in legacy IPP debts. Payments included:
Karpowership Ghana Co. Ltd: US$120,000,000
Cenpower Generation Co. Ltd: US$59,444,180
Twin City Energy (Amandi): US$37,986,534
Early Power Ltd: US$42,000,000
BXC Company Ltd: US$10,560,000
Meinergy Technology: US$8,820,000
Sunon Asogli Ghana Ltd: US$54,000,000
AKSA Energy Limited: US$30,000,000
Cenit Energy Ltd: US$30,000,000
These payments—totalling US$392,810,714—formed a substantial part of the US$1.470 billion used to stabilise the sector.
A new era of financial discipline
The Ministry of Finance reports that, beyond clearing inherited arrears, the government remained up-to-date with nearly all IPP invoices for 2025 through strict enforcement of the Cash Waterfall Mechanism.
The administration assures citizens, investors, and industry stakeholders that the era of unchecked energy sector debt accumulation is over, marking the beginning of a new chapter of financial discipline and energy-sector stability.
