The Government of Ghana says it has decisively resolved one of the most severe financial threats facing the country’s energy sector, paying a total of US$1.47 billion within its first year in office to clear accumulated debts and restore investor confidence.
In a statement issued by the Minister for Finance, Dr. Cassiel Ato Forson, the government said the intervention has effectively reset the energy sector after years of financial distress.
“The Government of Ghana, under the leadership of President John Dramani Mahama, has decisively resolved the crippling energy sector debt that posed one of the gravest risks to Ghana’s financial stability.”
Dr. Cassiel Ato Forson, Minister for Finance
When President Mahama assumed office in January 2025, the energy sector was already under intense strain. Persistent non-payment for gas supplied from the Offshore Cape Three Points field had pushed the sector to the brink, undermining relationships with upstream partners and international financiers.
Dr. Forson explained that the situation had become so severe that the World Bank Partial Risk Guarantee, valued at US$500 million, had been completely exhausted.
Restoring a Critical World Bank Safeguard
The Partial Risk Guarantee, established in 2015 under a previous National Democratic Congress government, played a pivotal role in attracting nearly US$8 billion in private sector investment into Ghana’s energy sector, particularly through the Sankofa Gas Project.
The facility was designed to guarantee payments to project partners ENI and Vitol in the event of shortfalls.
Dr. Forson noted that its exhaustion “represented a serious governance failure that undermined Ghana’s international credibility.”
Within a year, however, the Mahama administration moved to reverse that damage. By the end of December 2025, government had fully repaid US$597.15 million, including interest, drawn on the World Bank guarantee, restoring the facility in full.
“This achievement has restored the facility in full and reaffirmed Ghana’s standing as a credible and reliable partner on the global stage.”
Dr. Cassiel Ato Forson, Minister for Finance
Beyond restoring the World Bank guarantee, government also cleared all outstanding gas invoices owed to ENI and Vitol for electricity generation.
Between January and December 2025, these payments amounted to approximately US$480 million, ensuring Ghana is fully up to date on its obligations to the Sankofa partners.
According to Dr. Forson, prudent financial management has ensured that adequate budgetary provisions are now in place to sustain timely payments going forward, reducing the risk of future disruptions to power generation.
Engagements with Upstream Partners Yield Results
The government has also engaged other upstream operators to stabilise gas supply. Discussions with Tullow Oil and Jubilee Field partners have resulted in a comprehensive roadmap to guarantee full payment for all gas off-taken.
“This approach is aimed at supporting reliable nationwide electricity generation while accelerating industrial growth.”
Dr. Cassiel Ato Forson, Minister for Finance
Dr. Forson added that engagements with upstream partners have already led to increased gas production, aligned with a national vision to scale up domestic gas supply and reduce dependence on costly liquid fuels.
As part of a broader energy sector reset, the Mahama administration renegotiated all Independent Power Producer agreements to secure better value for money.
In 2025 alone, government paid approximately US$393 million in legacy IPP debts, easing long-standing liquidity pressures on power producers.
Dr. Forson said these payments were crucial to restoring confidence and anchoring stability across the sector, while ongoing reforms are aimed at preventing a recurrence of debt accumulation.
Strengthening Payment Discipline Going Forward
The Finance Minister stressed that clearing arrears was only part of the solution. Through disciplined implementation of the Cash Waterfall Mechanism by the Ministry of Energy, government has remained largely current on IPP invoices throughout 2025.
He assured industry stakeholders and international partners that payment performance will continue to improve, noting that the administration is firmly committed to sustaining the gains made so far.
Altogether, the Ministry of Finance estimates that approximately US$1.47 billion was paid in the 2025 fiscal year to rescue and restore Ghana’s energy sector. For Dr. Forson, the message is clear.
“The Government of Ghana assures the general public, industry stakeholders, and international partners that the era of uncontrolled energy sector debt accumulation is over.”
Dr. Cassiel Ato Forson, Minister for Finance
The payments, he added, signal a renewed commitment to fiscal discipline, responsible governance and long-term energy security, positioning the sector to better support economic growth and industrialisation.
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