The Government of Ghana has paid $1.47 billion to clear long-standing debts in its energy sector, a move officials say restores financial stability to the country’s power system and rebuilds confidence among international investors after years of mounting arrears. According to the Ministry of Finance, the payments were completed in 2025 and addressed liabilities that had strained relations with lenders, fuel suppliers, and power producers, while threatening the reliability of electricity supply in West Africa’s second-most populous nation.
A central element of the settlement was a $597.15 million payment to fully reinstate a World Bank partial risk guarantee that had been exhausted under the previous administration. The guarantee had played a critical role in mobilizing nearly $8 billion in private investment for the Offshore Cape Three Points gas field and the Sankofa Gas Project, both key pillars of Ghana’s domestic gas supply.
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The government also cleared approximately $480 million in outstanding gas invoices owed to international energy partners ENI and Vitol, ensuring the continuity of gas deliveries essential for thermal power generation. In addition, about $393 million was paid to settle legacy debts to Independent Power Producers, including major suppliers such as Karpowership and Cenpower, whose operations had been affected by delayed payments. Officials say the comprehensive debt clearance, completed within President John Dramani Mahama’s first year in office, marks a decisive turning point for a sector long burdened by financial imbalances and opaque liabilities.
“For years, arrears accumulated without a sustainable framework for repayment,” a senior finance official said, speaking on condition of anonymity because they were not authorized to comment publicly. “This exercise closes that chapter and allows the sector to move forward on a more credible footing.”
Ghana’s energy sector has historically been a drag on public finances, with state-owned utilities struggling to recover costs amid currency depreciation, high fuel prices, and contractual obligations denominated in dollars. The resulting payment delays eroded investor confidence and raised concerns about power shortages, despite the country’s relatively diversified generation mix.
The government says new budgetary provisions and renegotiated agreements with upstream gas partners are designed to prevent a recurrence of arrears, while boosting domestic gas production to reduce dependence on expensive fuel imports .Analysts note that the move could ease pressure on Ghana’s broader economic recovery, particularly as the country works to stabilize its finances following debt restructuring talks with external creditors.
“Clearing these liabilities sends a strong signal,” said an Accra-based energy economist. “It suggests a willingness to confront structural problems that have long undermined the sector.” For Ghana, officials argue, the debt settlement is not merely an accounting exercise but a strategic reset—one aimed at securing reliable power supply, restoring institutional credibility, and laying a foundation for sustained economic growth.
