Cassiel Ato Forson
The Mahama Administration says it has resolved the deep-seated energy sector debt crisis that threatened the country’s financial stability, restoring confidence among investors and international partners after years of persistent payment defaults.
In a statement issued yesterday, the Ministry of Finance said that when President John Dramani Mahama assumed office in January 2025, the energy sector was on the brink of collapse due largely to non-payment for gas supplied from the Offshore Cape Three Points (OCTP) field to the power sector.
This situation, the Ministry noted, had led to the complete depletion of the US$500 million World Bank Partial Risk Guarantee (PRG) under the previous administration.
The statement indicated that the PRG, established in 2015 during an earlier National Democratic Congress (NDC) government, was designed to protect investors by guaranteeing payments to Sankofa Gas Project partners, ENI and Vitol, in the event of shortfalls,
According to the Finance Ministry, its exhaustion undermined the country’s international credibility and exposed serious governance lapses, particularly given the facility’s role in unlocking nearly US$8 billion in private sector investment into the energy sector.
The statement said that, as at December 31, 2025, government had fully repaid US$597.15 million, including interest, drawn on the World Bank guarantee.
This repayment has restored the PRG in full, a move the Ministry described as a clear signal of fiscal discipline and responsible economic management.
Beyond restoring the guarantee, the government also reportedly settled all outstanding gas invoices owed to ENI and Vitol between January and December 2025.
The statement noted that these payments, amounting to about US$480 million, have ensured that Ghana is fully up to date on its obligations to the Sankofa partners, with budgetary provisions now in place to sustain timely payments in the future.
The Ministry further disclosed that constructive engagements have been held with Tullow Oil and Jubilee Field partners, resulting in an agreed roadmap to guarantee full payment for all gas off-taken.
This, it said, is expected to support reliable nationwide electricity generation and accelerate industrial growth.
According to the statement, the government’s engagements with upstream partners have already yielded increased gas production, aligned with a broader strategy to expand domestic gas supply and reduce dependence on expensive liquid fuels.
As part of what it described as a comprehensive energy sector reset, the statement pointed out that the Mahama Administration had also renegotiated all Independent Power Producer (IPP) agreements to secure better value for money.
In 2025 alone, government paid approximately US$393 million in legacy IPP debts, while remaining largely current on IPP invoices through disciplined implementation of the Cash Waterfall Mechanism by the Ministry of Energy.
Altogether, the Ministry of Finance said it disbursed about US$1.47 billion in 2025 to stabilise and restore the energy sector.
The government assured the public, industry players and international partners that the era of uncontrolled energy sector debt accumulation has ended, pledging continued improvements in payment performance and sector governance.
A Daily Guide Report