Mahama Administration Settles US$1.47bn Energy Debt, Reinstates World Bank Guarantee Within One Year

The Government of Ghana, under the leadership of President John Dramani Mahama, has cleared a significant portion of legacy energy sector debt, paying approximately US$1.47 billion in 2025 to stabilise the sector and restore international confidence.

Upon assuming office in January 2025, the Mahama Administration inherited an energy sector under severe strain, marked by years of non-payment for gas supplied from the Offshore Cape Three Points (OCTP) field. The situation had resulted in the complete depletion of a US$500 million World Bank Partial Risk Guarantee (PRG), a facility established in 2015 to backstop payments to Sankofa Gas Project partners ENI and Vitol and unlock nearly US$8 billion in private investment.

Government sources say the exhaustion of the PRG had undermined Ghana’s international credibility and posed a major risk to financial stability. In response, the administration prioritised restoring the guarantee and clearing arrears across the energy value chain.

As at 31 December 2025, Government had fully repaid US$597.15 million, inclusive of interest, drawn on the World Bank Guarantee—thereby restoring the facility in full. The move is described as a major step in reaffirming Ghana’s standing as a credible partner in international finance.

Between January and December 2025, Government also settled all outstanding gas invoices owed to ENI and Vitol for power generation, amounting to approximately US$480 million, bringing payments to the Sankofa partners fully up to date. Authorities say adequate budgetary provisions have been secured to ensure timely payments going forward.

In parallel, Government engaged Tullow Oil and Jubilee Field partners, agreeing on a roadmap to guarantee full payment for gas off-taken, aimed at supporting reliable nationwide electricity supply and accelerating industrial growth. These engagements have already contributed to increased gas production, aligned with a strategy to expand domestic gas supply and reduce reliance on expensive liquid fuels.

As part of a broader sector reset, the Mahama Administration also renegotiated all Independent Power Producer (IPP) agreements to secure improved value for money. In 2025 alone, Government paid about US$393 million in legacy IPP debts. Major beneficiaries included Karpowership Ghana, Cenpower Generation, Twin City Energy (Amandi), Early Power, Sunon Asogli, AKSA Energy, and others.

Altogether, payments made by the Ministry of Finance in 2025 to rescue and restore the energy sector amounted to approximately US$1.47 billion.

Beyond clearing inherited arrears, Government says disciplined implementation of the Cash Waterfall Mechanism by the Ministry of Energy has ensured that most IPP invoices for 2025 remain current, with a commitment to further improving payment performance.

The Government has assured the public, industry stakeholders, and international partners that the era of uncontrolled energy sector debt accumulation is over, pledging sustained fiscal discipline to safeguard power sector stability and support long-term economic growth.