Ghana’s government has paid $1.47 billion in 2025 to settle long-standing debts in the energy sector, restoring a crucial World Bank guarantee and addressing arrears owed to independent power producers and gas suppliers, the Ministry of Finance announced on Monday.
The payments mark a significant step in stabilising a sector that has struggled with chronic power outages linked to unpaid obligations. Last year, President John Dramani Mahama pledged to reduce the roughly $2.5 billion owed to independent power producers (IPPs) and gas suppliers, part of an effort to strengthen Ghana’s energy reliability and investment climate.
According to the finance ministry, over $597 million was repaid to the World Bank, fully restoring a partial risk guarantee that underpins gas supplies from the Offshore Cape Three Points field. Established in 2015, the guarantee protects nearly $8 billion in private investment in Ghana’s energy sector, and its depletion in recent years had raised concerns among international partners about the government’s creditworthiness and commitment to the sector.
An additional $480 million was disbursed to Italian energy company ENI and commodities trader Vitol to settle outstanding gas invoices related to electricity generation under the Sankofa Gas Project. Approximately $393 million was paid to independent power producers, including $120 million to Turkey’s Karpowership and $59.4 million to Cenpower Generation, according to the ministry’s breakdown.
Independent producers welcomed the move, describing it as a milestone in restoring financial stability and operational confidence in Ghana’s power sector. “Clearing these long-standing debts allows us to plan and invest with greater certainty,” a representative from one of the IPPs said in a separate statement.
Economists say that while the payments will not solve all challenges in Ghana’s energy sector, they provide a critical foundation for operational stability and investor confidence. By settling legacy debts, the government has not only addressed immediate liquidity issues for power producers but also signalled its commitment to honouring financial obligations, which is essential for attracting further private and foreign investment.
The move is also part of a broader strategy to reduce Ghana’s reliance on expensive liquid fuels by boosting domestic gas production. Ghana has faced mounting costs from fuel imports, which have strained public finances and contributed to higher electricity tariffs. Strengthening domestic gas supplies is expected to lower generation costs, enhance energy security, and make electricity more affordable for households and businesses.
Finance ministry officials noted that the debt clearance was achieved through disciplined fiscal management, while provisions were secured to ensure timely payment of future obligations. The government has also renegotiated agreements with independent power producers and is working with Tullow Oil and Jubilee Field partners to establish a roadmap for ongoing payments.
The broader economic implications of these payments are significant. A more stable power sector can reduce energy-related disruptions for businesses, supporting economic productivity and growth. Ghana’s manufacturing and industrial sectors, which are sensitive to electricity supply reliability, stand to benefit from a more predictable energy landscape. In addition, improved investor confidence could encourage further foreign direct investment in energy infrastructure, including renewable energy projects, which are increasingly important for sustainable growth and climate resilience.
However, challenges remain. While the debt clearance addresses past arrears, the sector continues to face structural issues, including tariff reforms, gas supply constraints, and the need for regulatory improvements. Analysts caution that sustained financial and operational discipline will be necessary to prevent the accumulation of new arrears and ensure that Ghana’s energy sector can meet growing domestic demand.
For now, the $1.47 billion payment is a major step toward stabilising Ghana’s energy landscape, restoring the confidence of international lenders and local producers alike, and supporting the country’s broader economic recovery and development ambitions.
