Ghana’s Power Reckoning: US$1.47bn Paid, a Dark Chapter Closed!
After years in which unpaid bills translated into chronic power outages, Ghana has moved to settle the score. The government’s US$1.47 billion clearance of energy sector debts in 2025 directly addresses arrears that destabilised electricity supply and strained investor confidence between 2021 and 2024, while signalling a shift toward tighter payment discipline and structural repair across the power value chain.
Accra | January 12, 2025 — The Government of Ghana has disbursed US$1.47 billion in the 2025 fiscal year to clear long-standing debts in the energy sector, a decisive fiscal intervention aimed at stabilising the country’s troubled power system and restoring confidence among foreign partners and domestic stakeholders. The settlement, disclosed by the Ministry of Finance on January 12, covers repayments that had undermined the financial architecture of the power sector and its supply chain.
The payments include the full restoration of the US$500 million World Bank Partial Risk Guarantee, which had been entirely drawn down before 2025 due to protracted non-payments for gas supplied from the Offshore Cape Three Points (OCTP) field. Government figures show that US$597.15 million (including interest) was repaid to the World Bank, reinstating the guarantee in full and reaffirming Ghana’s creditworthiness with international counterparts.
Between January and December 2025, the state also settled approximately US$480 million in outstanding gas invoices owed to ENI and Vitol for electricity generation under the Sankofa Gas Project. Outstanding legacy debts to Independent Power Producers (IPPs) — long a flashpoint in sector turmoil — were similarly addressed, with about US$393 million disbursed across producers including Karpowership Ghana, Cenpower Generation, Sunon Asogli, and others. Independent power producers described the clearance of long-outstanding arrears as a critical milestone in restoring financial stability and operational confidence in Ghana’s power sector.
The finance ministry stressed that the combined payments — closing inherited obligations and aligning current contracts — have effectively “rescued and restored Ghana’s energy sector.” It pledged continued discipline, particularly in payments to IPPs, to prevent re-accumulation of arrears.
From Blackouts to Balance Sheets: The Sector’s Struggles, 2021-24
The backdrop to this fiscal reset was a prolonged period of instability in Ghana’s power sector. Between 2021 and 2024, chronic non-payment to generators and gas suppliers eroded investor confidence and strained critical infrastructure agreements, reaching $US1.6bn in 2022. By late 2024, repeated load shedding and erratic supply had once again become part of daily life in both urban and industrial centres. While official data from this period varies, independent reporting and sector commentary underscored that arrears to IPPs and gas suppliers had reached levels that strained contract performance and threatened generation continuity. According to the Chamber of Independent Power Producers Ghana, this was what the payment picture looked like in 2024: “... despite ECG’s commitment to a fixed US$43 million monthly sum to IPPs, it continues to pile up about 70% of its monthly obligations to the Independent Power Producers alone.”
A sign of this strain was the full depletion of the World Bank’s Partial Risk Guarantee, a facility intended to underwrite payment shortfalls and underpin nearly US$8 billion in private investment in the Sankofa Gas Project. Its exhaustion before 2025 was widely interpreted by financiers and markets as a barometer of payment discipline risks within the sector.
The cumulative effect of these fiscal and operational disconnects was a period of heightened uncertainty for electricity supply — a reality that shaped investment decisions, curtailed generation potential and accelerated reliance on costly liquid fuel alternatives when gas flows were constrained.
A Reset in Motion: Reforms and Energy Sector Strengthening
While the US$1.47 billion payment anchors the narrative today, policymakers and sector actors trace it to broader reform efforts that took shape in 2024 and gained traction through 2025.
Cash Waterfall Mechanism and Payment Discipline
The Cash Waterfall Mechanism (CWM), designed to prioritise revenue flows from the Electricity Company of Ghana (ECG) through to fuel suppliers and generators, has been more rigorously enforced in recent quarters. Government and energy ministry statements describe enhanced compliance with the CWM, with generated cash now flowing more predictably to service obligations and reduce arrears.
Improved commercial performance at ECG has been publicly highlighted by energy officials. Reports from mid-2025 show ECG reporting significant record-breaking monthly revenue, attributed in part to upgraded billing systems and tighter financial controls that complement the CWM.
Gas Supply Expansion
On the supply side, partnerships with upstream operators have yielded incremental gains. In July 2025, Ghana announced an agreement with Eni to increase natural gas supply by an additional 30 million standard cubic feet per day, a move expected to strengthen fuel availability for generation and reduce dependence on expensive liquid fuels.
Complementing this, Eni and its OCTP partners — including Vitol and Ghana National Petroleum Corporation — reported a boost in gas processing capacity to 270 million standard cubic feet per day, bolstering domestic gas throughput and reinforcing the Sankofa field’s contribution to thermal power generation.
Second Gas Processing Plant Initiative
In May 2025, government inaugurated the technical and implementation committees for a Second Gas Processing Plant (GPP II), an infrastructure project framed as critical to reducing fuel costs and easing sector pressures over the medium term. The plant is expected to markedly expand Ghana’s gas processing capacity and lower generation costs by decreasing reliance on imported liquid fuel.
Conclusion: Stability on a New Footing
Taken together, the US$1.47 billion settlement and the suite of reforms underline a deliberate shift from episodic fiscal firefighting to structural correction in Ghana’s energy sector. By addressing arrears that had eroded confidence, reinstating guarantees that underpin critical investment contracts, and reinforcing mechanisms that anchor payment discipline, policymakers are seeking to pivot the sector away from recurrent crises and toward sustained reliability.
For investors, utilities and everyday consumers alike, the payments and accompanying reforms signal a recalibrated approach — one grounded in predictable cash flows, bolstered supply lines and the cautious management of contingent liabilities that once threatened broader economic stability.
