By Sarah Baafi
The Government of Ghana says it has paid a total of US$1.47 billion within its first year in office to clear legacy energy sector debts and restore the country’s credibility with international partners, marking what it describes as a decisive reset of the troubled power sector.
According to the Ministry of Finance, the payments were made between January and December 2025 under the leadership of President John Dramani Mahama, following years of accumulated arrears that had pushed the energy sector to the brink of financial collapse.
A major milestone highlighted by government is the full restoration of the World Bank Partial Risk Guarantee (PRG) tied to the Sankofa Gas Project. When the Mahama administration assumed office in January 2025, the US$500 million guarantee originally established in 2015 had been completely exhausted due to prolonged non-payment for gas supplied from the Offshore Cape Three Points (OCTP) field.
The PRG was a key instrument that supported nearly US$8 billion in private sector investment in Ghana’s energy sector, particularly through the ENI- and Vitol-led Sankofa Gas Project. Its depletion had raised serious concerns about Ghana’s governance and payment discipline.
As of December 31, 2025, government says it had fully repaid US$597.15 million, including interest, drawn on the World Bank guarantee, thereby restoring the facility in full.
In addition, the Ministry of Finance disclosed that all outstanding gas invoices owed to ENI and Vitol for electricity generation were settled in 2025 at a cost of approximately US$480 million, bringing Ghana fully up to date on its obligations to the Sankofa partners. Budgetary provisions have since been secured to ensure timely payments going forward.
Government has also engaged upstream producers, including Tullow Oil and Jubilee Field partners, to agree on a roadmap that guarantees full payment for gas supplied. These engagements have already resulted in increased gas production, aimed at improving electricity reliability and reducing dependence on costly liquid fuels.
As part of broader reforms, the Mahama administration says it has successfully renegotiated all Independent Power Producer (IPP) agreements to achieve better value for money. In 2025 alone, government paid about US$393 million in legacy IPP debts.
Key beneficiaries of the IPP debt payments include Cenpower Generation, Twin City Energy (Amandi), Early Power, Sunon Asogli, BXC Company, Meinergy Technology, and Cenit Energy, among others.
The Ministry noted that, beyond clearing inherited arrears, government has strengthened implementation of the Cash Waterfall Mechanism, helping ensure that most IPP invoices for 2025 were paid on time.
“Altogether, the Ministry of Finance has paid approximately US$1.470 billion in the 2025 fiscal year to rescue and restore Ghana’s energy sector,” the statement said.
Government assured the public, industry players, and international partners that the era of unchecked energy sector debt accumulation is over, pledging continued discipline to safeguard power sector stability and support industrial growth.
