Mahama Administration Clears $1.47bn Energy Debt, Restores World Bank Guarantee Within First Year
Hilda Appiah
The Mahama administration has paid a total of US$1.47 billion to clear outstanding debts in Ghana’s energy sector, successfully restoring 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, the decisive intervention has eased severe financial pressures that once threatened the stability of the country’s energy sector and wider economy.
When President John Dramani Mahama assumed office in January 2025, the energy sector was on the brink of collapse after years of persistent non-payment to gas suppliers serving the Offshore Cape Three Points (OCTP) field. As a result, the World Bank’s US$500 million PRG, established in 2015 under the previous NDC government to support the Sankofa Gas Project, had been completely exhausted.
The guarantee was designed to assure timely payments to project partners, including ENI and Vitol. However, its depletion due to payment shortfalls had raised serious concerns about Ghana’s credibility among international investors.
The Finance Ministry noted that in a major show of fiscal discipline, the government fully repaid US$597.15 million, including interest, by December 31, 2025, to restore the World Bank guarantee. The move has reaffirmed Ghana’s standing as a reliable partner on the global stage.
Between January and December 2025, the government also settled outstanding gas invoices owed to ENI and Vitol, amounting to approximately US$480 million, thereby fully covering Ghana’s obligations under the Sankofa Gas Project.
The statement further disclosed that adequate budgetary provisions have now been secured to ensure timely payments going forward. Engagements with upstream partners, such as Tullow Oil and Jubilee Field operators, have resulted in a comprehensive roadmap guaranteeing full payment for all gas supplied.
These measures, the government stated, are designed to support reliable nationwide electricity generation, promote industrial growth, and reduce dependence on expensive liquid fuels. Increased gas production has already been recorded as Ghana accelerates efforts to scale up domestic gas supply.
As part of broader reforms in the energy sector, the Mahama administration has also renegotiated all Independent Power Producer (IPP) agreements to secure better value for money. In 2025 alone, the government paid approximately US$393 million in legacy IPP debts.
The Ministry of Finance emphasised that the reset of the energy sector reflects the administration’s commitment to sound financial management and long-term economic stability.
