The Government of Ghana says it has decisively stabilised the country’s energy sector after paying approximately US$1.47 billion in 2025 to clear legacy debts, restore investor confidence and fully reinstate the World Bank Partial Risk Guarantee (PRG) within its first year in office.
According to a statement issued by the Ministry of Finance on Monday, January 12, 2026, the Mahama Administration inherited an energy sector on the brink of collapse, weighed down by years of persistent non-payment for gas supplied to power producers. By the time President John Dramani Mahama assumed office in January 2025, the US$500 million World Bank PRG, which underpinned the Sankofa Gas Project, had been completely exhausted under the previous administration.
The PRG, established in 2015, played a critical role in attracting nearly US$8 billion in private investment into Ghana’s energy sector by guaranteeing payments to key project partners, ENI and Vitol, in the event of government payment shortfalls. Its depletion, the Ministry noted, undermined Ghana’s international credibility and threatened long-term energy security.
However, through what it described as disciplined fiscal management and responsible leadership, the government says it has, as of December 31, 2025, fully repaid US$597.15 million, inclusive of interest, drawn on the World Bank Guarantee. This repayment has restored the facility in full and reaffirmed Ghana’s standing as a credible partner on the global financial stage.
In addition, between January and December 2025, the government settled all outstanding gas invoices owed to ENI and Vitol for electricity generation, amounting to approximately US$480 million, ensuring Ghana is fully current on its obligations to the Sankofa partners. Constructive engagements have also been held with Tullow Oil and Jubilee Field partners to agree on a comprehensive roadmap guaranteeing full payment for all gas off-taken.
Beyond gas supply obligations, the Ministry disclosed that the government paid about US$393 million in legacy debts owed to Independent Power Producers (IPPs) in 2025 alone. Major beneficiaries included Karpowership Ghana, Cenpower Generation, Sunon Asogli, Early Power, Twin City Energy and AKSA Energy, among others. In total, IPP payments in 2025 reached US$392.8 million, significantly easing long-standing financial pressures in the sector.
As part of a broader energy sector reset, the Mahama Administration also renegotiated all IPP agreements to secure improved value for money for Ghanaians, while scaling up domestic gas supply to reduce reliance on costly liquid fuels.
The Ministry of Finance said these interventions have been supported by the disciplined implementation of the Cash Waterfall Mechanism, ensuring government remained largely current on IPP invoices throughout 2025, while adequate budgetary provisions have been made to sustain timely payments going forward.
Government insists the measures are already supporting reliable nationwide electricity generation, accelerating industrial growth and restoring confidence among industry stakeholders and international partners.
“The era of uncontrolled energy sector debt accumulation is over,” the statement assured, signalling a renewed commitment to fiscal discipline, transparency and long-term energy sector sustainability.
Author: Edem Latsu Nukafu
Edem Latsu Nukafu, a passionate communications professional dedicated to public relations, journalism, media strategy, and content development. He holds both a Diploma and Bachelor of Arts Degree in Communication Studies (Public Relations) from the University of Media, Arts and Communication – UniMAC-IJ. A member of Ghana Journalists Association (GJA).
