Ghana energy sector debt has long been one of the country’s most pressing fiscal and infrastructure challenges. In 2025, the Government of Ghana announced a major breakthrough, confirming that it spent US$1.47 billion to fully clear legacy debts in the energy sector—bringing an end to years of arrears that strained electricity supply, weakened investor confidence, and disrupted gas procurement.
The announcement, made by the Ministry of Finance, marks a decisive reset for Ghana’s power sector and signals renewed commitment to financial discipline, energy security, and private sector participation.
According to the Ministry, the debt clearance was completed within the first year of President John Dramani Mahama’s administration, targeting long-standing obligations inherited from previous governments. These arrears had accumulated across gas suppliers, Independent Power Producers (IPPs), and international financial guarantees, creating systemic risk for the electricity value chain.
A central component of the settlement was a US$597.15 million payment to fully reinstate a World Bank Partial Risk Guarantee (PRG) that had been drawn down in earlier years. The guarantee was instrumental in unlocking nearly US$8 billion in private investment for the Offshore Cape Three Points gas field and the Sankofa Gas Project, both of which are critical to Ghana’s domestic gas supply.
The restoration of the PRG significantly improves Ghana’s standing with international lenders and investors, reducing perceived sovereign and sector risk.
Payments to ENI, Vitol, and Independent Power Producers
In addition to restoring the World Bank guarantee, the government cleared approximately US$480 million in outstanding gas invoices owed to international energy partners ENI and Vitol. These payments resolved supply bottlenecks that had previously affected gas-to-power generation and electricity reliability.
A further US$393 million was paid to settle legacy debts owed to Independent Power Producers. Beneficiaries included major power suppliers such as Karpowership and Cenpower, whose unpaid invoices had threatened generation capacity and discouraged further private investment.
Energy sector analysts note that resolving IPP arrears is critical for stabilising Ghana’s electricity market, as unpaid obligations often lead to reduced generation, contractual disputes, and higher long-term costs for consumers.
Preventing a Return of Ghana Energy Sector Debt
The Ministry of Finance has emphasised that clearing the backlog is only part of the reform agenda. New budgetary provisions, alongside renegotiated agreements with upstream gas partners, have been introduced to ensure timely payments and prevent future debt accumulation in the energy sector.
Officials argue that disciplined payment structures and transparent contracting are essential to avoiding a repeat of past debt cycles.
A Turning Point for Power Supply and Investment
Government officials describe the clearance of Ghana’s energy sector debt as the end of an era of unchecked arrears. With legacy obligations settled, the sector now has a stronger foundation for reliable power delivery, long-term planning, and renewed private sector participation.
The move is also expected to have broader economic implications. Stable electricity supply supports industrial growth, improves business competitiveness, and reduces fiscal pressure caused by emergency energy interventions.
The clearance of Ghana energy sector debt is being widely interpreted as a strong signal of renewed fiscal discipline and policy credibility. By settling arrears owed to international gas suppliers, Independent Power Producers, and multilateral partners, the government has reduced counterparty risk and restored confidence in contractual enforcement. Analysts suggest the move could lower the cost of capital for future power projects, unlock delayed investments, and improve Ghana’s appeal to long-term investors across gas-to-power, renewable energy, and transmission infrastructure.
As Ghana continues to balance economic recovery with infrastructure investment, the resolution of energy sector debt stands out as a significant policy milestone—one that could reshape the country’s power sector trajectory for years to come.
