Ghana settles $1.47bn energy debts to reset power sector

Ghana paid $1.47 billion in 2025 to clear long-standing debts in its energy sector, a move the government says has restored stability and confidence in the country’s power system, according to a Reuters report on January 12th.

The payments cover years of unpaid bills that had strained relations with investors, power producers and international partners, and had contributed to frequent electricity outages across the country.

In a statement, the finance ministry said that more than $597 million was used to fully restore a World Bank partial risk guarantee that had been depleted under the previous government. The guarantee is linked to gas supplies from the Offshore Cape Three Points field and was set up in 2015 to protect nearly $8 billion in private investment in Ghana’s energy sector.

Officials said the depletion of the guarantee had damaged Ghana’s credibility with lenders and investors. Restoring it is expected to help rebuild trust and support future investment in power generation and gas production. Moreover, Ghana removed VAT on mineral exploration to attract investors. 

According to an Africa News report, the government also paid around $480 million to clear outstanding gas invoices owed to energy partners ENI and Vitol. These payments relate to gas supplied for electricity generation through the Sankofa Gas Project, a key source of fuel for Ghana’s power plants.

Additionally, about $393 million in legacy debts owed to independent power producers were settled. This included roughly $120 million paid to Karpowership and $59.4 million to Cenpower Generation, with other producers also receiving payments under the settlement plan.

In a separate announcement, independent power producers stated that the clearance of long-overdue debts marks a significant step toward restoring financial stability and enhancing confidence in the sector. Many producers had struggled to operate efficiently due to delayed payments, which in turn affected the power supply.

The debt clearance was completed within President John Dramani Mahama’s first year in office. Last year, he pledged to pay the estimated $2.5 billion owed to power producers and gas suppliers and to stop further debt accumulation.

“The era of uncontrolled energy sector debt accumulation is over,” the finance ministry said, adding that tighter budget controls and disciplined financial management made the payments possible. 

The government said it has renegotiated agreements with independent power producers and is working on a clear payment roadmap. It also plans to boost domestic gas production to reduce reliance on costly liquid fuels. Officials said the measures are aimed at ensuring a more reliable electricity supply and supporting long-term economic growth.

Reuters, Africa News, Maghrebi.org