Gov’t Clears US$1.47bn Energy Debt

The Government of Ghana says it has paid a total of US$1.470 billion within its first year in office to clear accumulated energy sector debts, restore Ghana’s credibility with international partners, and stabilise power generation.

According to a government statement issued on Monday, the payments were by the governemnt of Ghana to address challenges in the sector.

At the time President Mahama took over, the energy sector had been severely strained by years of persistent non-payment for gas supplied from the Offshore Cape Three Points (OCTP) Sankofa Field, a situation that had depleted Ghana’s US$500 million World Bank Partial Risk Guarantee (PRG).

The PRG, established in 2015, was designed to guarantee payments to Sankofa project partners ENI and Vitol in the event of payment shortfalls by the power sector. The guarantee enabled nearly US$8 billion in private sector investment into Ghana’s energy sector, according to the statement.

Government described the complete depletion of the guarantee under the previous administration as a “serious governance failure” that undermined Ghana’s international credibility and exposed the country to significant financial and energy security risks.

To address the situation, the Mahama administration said it had, as of December 31, 2025, fully repaid US$597.15 million, including interest, drawn on the World Bank guarantee. The repayment has restored the PRG in full and re-established Ghana as a credible partner in the international financial market.

In addition, government disclosed that between January and December 2025, it settled all outstanding gas invoices owed to ENI and Vitol for electricity generation. These payments amounted to approximately US$480 million, bringing Ghana fully up to date on its obligations to the Sankofa partners.

The statement noted that adequate budgetary provisions have now been secured to ensure timely payments going forward, preventing a recurrence of the debt build-up that previously plagued the sector.

Beyond the OCTP field, government said it has also held extensive engagements with Tullow Oil and the Jubilee Field partners, agreeing on a comprehensive roadmap to guarantee full payment for all gas off-taken. The aim, according to the statement, is to ensure reliable nationwide electricity generation while supporting industrial growth.

The administration further indicated that ongoing engagements with upstream partners have already resulted in increased gas production, guided by a national strategy to scale up domestic gas supply and reduce Ghana’s dependence on expensive liquid fuels.

As part of what it termed a broader “energy sector reset,” government said it has successfully renegotiated all Independent Power Producer (IPP) agreements to secure improved value for money for the state.

In 2025 alone, the government paid approximately US$393 million in legacy IPP debts, a move it says has further consolidated stability in the energy sector.

The administration maintains that the combined interventions demonstrate fiscal discipline and responsible leadership, while laying a stronger foundation for energy security, investor confidence, and long-term economic growth.