Gov't settles $1.47bn Energy Sector debt within first year in office
Finance Minister Cassiel Ato Forson announces a comprehensive debt clearance programme, restoring the World Bank guarantee and settling obligations to gas suppliers and Independent Power Producers.
Ghana's Ministry of Finance has disclosed that the government paid approximately $1.47 billion during the 2025 fiscal year to resolve outstanding energy sector obligations, marking a significant intervention to restore financial stability to the country's power industry.
Finance Minister Cassiel Ato Forson, in announcing the achievement, described the energy sector debt as one of the most serious risks to Ghana's financial stability that the Mahama administration inherited upon assuming office in January 2025.
World Bank Partial Risk Guarantee Reinstated
Central to the government's debt resolution strategy was the full repayment of $597.15 million, inclusive of interest, to restore the World Bank Partial Risk Guarantee facility. The repayment, completed by 31 December 2025, reinstated a guarantee that had been entirely depleted under the previous administration.
The Partial Risk Guarantee, established in 2015 under the previous National Democratic Congress government, served as a critical financial instrument that facilitated nearly $8 billion in private sector investment into Ghana's energy sector through the Sankofa Gas Project. The facility was structured to guarantee payments to project partners ENI and Vitol in instances of payment shortfalls.
According to the Finance Minister, the depletion of this guarantee represented a significant governance failure that compromised Ghana's standing with international financial partners.
Gas Supply Arrears Cleared
The government settled all outstanding gas invoices owed to ENI and Vitol for electricity generation between January and December 2025, with payments totalling approximately $480 million. These settlements have brought Ghana current on its contractual obligations to the Sankofa partners.
The Ministry of Finance indicated that prudent financial management has enabled adequate budgetary provisions to ensure timely payments going forward.
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Additionally, the government has concluded constructive engagements with Tullow Oil and Jubilee Field partners, establishing a comprehensive payment roadmap for gas off-take. This arrangement is designed to support reliable electricity generation nationwide whilst accelerating industrial growth.
The Finance Minister noted that engagements with upstream partners have already yielded increased gas production, guided by a strategic vision to rapidly expand domestic gas supply to meet growing energy demand and reduce dependence on expensive liquid fuels.
Independent Power Producer Obligations Addressed
As part of a broader energy sector restructuring, the administration settled approximately $393 million in legacy debts to Independent Power Producers during 2025. The government also successfully renegotiated all IPP agreements to secure improved value for money.
The breakdown of IPP payments is as follows:
Karpowership Ghana Co. Ltd – $120,000,000
Cenpower Generation Co. Ltd – $59,444,180
Sunon Asogli Ghana Ltd – $54,000,000
Early Power Ltd – $42,000,000
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Twin City Energy (Amandi) – $37,986,534
AKSA Energy Limited – $30,000,000
Cenit Energy Ltd – $30,000,000
BXC Company Ltd – $10,560,000
Meinergy Technology – $8,820,000
Total: $392,810,714
Sustained Payment Discipline
Beyond clearing inherited arrears, the government has maintained currency on substantially all IPP invoices for 2025 through disciplined implementation of the Cash Waterfall Mechanism by the Ministry of Energy. The administration has committed to further improving payment performance across all IPP obligations.
In his statement, Finance Minister Forson assured the public, industry stakeholders, and international partners that "the era of uncontrolled energy sector debt accumulation is over."
The $1.47 billion debt clearance programme represents one of the most significant fiscal interventions in Ghana's energy sector in recent years, addressing structural payment challenges that had threatened the viability of the country's power generation capacity and its credibility with international financial institutions.
