What's Happening?
Ghana has successfully cleared $1.47 billion in energy sector debts, a move that restores its credibility as a reliable partner in the global energy market. The administration of President John Dramani Mahama, which took office in January 2025, inherited
a power sector burdened by years of unpaid gas supplies. The repayment includes $597.15 million under the World Bank Partial Risk Guarantee, which had supported significant private investment through the Sankofa Gas Project. Additionally, the government has settled outstanding invoices with Sankofa partners ENI and Vitol, totaling approximately $480 million. These efforts are part of a broader strategy to stabilize the energy sector, reduce reliance on costly liquid fuels, and ensure consistent electricity generation nationwide.
Why It's Important?
Clearing the energy sector debts is a crucial step for Ghana in bolstering investor confidence and supporting industrial growth. By restoring the World Bank Guarantee and settling outstanding invoices, Ghana reaffirms its position as a credible partner in the energy sector. This development is expected to attract further investment, reduce operational risks, and enhance the country's energy security. The government's financial management and renegotiation of Independent Power Producer agreements demonstrate a commitment to securing better value for consumers and investors. The move also highlights the importance of sustainable financial practices in maintaining a stable energy supply.
What's Next?
Ghana's government plans to continue improving payment performance through the disciplined implementation of the Cash Waterfall Mechanism. This approach aims to maintain current payments on all Independent Power Producer invoices and further stabilize the energy sector. The administration's efforts to engage with upstream partners and develop a roadmap for full payment of gas off-taken are expected to support long-term energy security. Industry analysts anticipate that these measures will lead to increased investor confidence and contribute to the country's economic growth.
