Government clears over $1.4 billion energy sector debts

Minister for Finance, Dr Cassiel Ato Forson says the government has cleared over $1.4 billion in energy sector obligations, restoring stability within the Mahama administration’s first year.

Dr Forson disclosed the development in a post on X on Monday morning, outlining payments made in 2025 to stabilise Ghana’s energy sector and rebuild international confidence.

According to him, the Government of Ghana, under President John Dramani Mahama, acted decisively to address deep-seated energy sector debts that had become one of the most serious threats to national financial stability.

He explained that when President Mahama assumed office in January 2025, the sector was on the brink of collapse due to years of unpaid gas supplied from the Offshore Cape Three Points (OCTP) field to power producers. As a result, the World Bank’s $500 million Partial Risk Guarantee (PRG) had been fully exhausted.

“The PRG, established in 2015, was a critical safeguard that enabled nearly $8 billion in private investment through the Sankofa Gas Project,” Dr Forson noted, adding that its depletion undermined Ghana’s credibility with international partners.

In his post, the finance minister said the government has, as of December 31, 2025, fully repaid $597.15 million, including interest, drawn on the World Bank guarantee.

He described the repayment as a strong signal of fiscal discipline that has restored the facility in full.

Between January and December 2025, the government also cleared all outstanding gas invoices owed to ENI and Vitol, amounting to approximately $480 million. Dr Forson said these payments ensured Ghana is fully current on its obligations to Sankofa partners.

He added that adequate budgetary provisions have now been secured to sustain timely payments, while engagements with Tullow Oil and Jubilee Field partners have produced a roadmap guaranteeing full payment for all gas off-taken.

According to Dr Forson, the measures are aimed at supporting reliable nationwide electricity generation and accelerating industrial growth.

He said discussions with upstream partners have already led to increased gas production as the government works to expand domestic gas supply and reduce reliance on expensive liquid fuels.

The finance minister also disclosed that all Independent Power Producer agreements have been renegotiated to secure better value.

In 2025 alone, about $393 million in legacy IPP debts were paid to companies including Karpowership, Sunon Asogli, Cenpower, Amandi and Early Power.

Dr Forson said total payments by the Ministry of Finance to rescue and restore the energy sector in the 2025 fiscal year amounted to approximately $1.47 billion.