Ghana’s Independent Power Generators (IPGs) have welcomed the government’s settlement of $1.47 billion in energy sector arrears, describing the move as a critical step toward restoring financial stability and rebuilding investor confidence in the country’s power industry.
In a statement released on January 12, the IPGs said payments made in 2025 to independent power producers had eased severe liquidity constraints that have burdened the sector for several years, improving cash flow, operational planning and confidence among market participants.
The group credited the Ministry of Finance for mobilizing significant financial resources to settle arrears and the Ministry of Energy and Green Transition for reinforcing reforms aimed at improving payment discipline. Key among these reforms is the Cash Waterfall Mechanism (CWM), which prioritizes the distribution of sector revenues to critical service providers including power generators.
A detailed breakdown shows Karpowership Ghana received $120 million, Cenpower Generation $59.4 million, Twin City Energy Amandi $38 million, Early Power $42 million and Sunon Asogli Ghana $54 million. Other beneficiaries include BXC Company, Meinergy Technology, AKSA Energy and Cenit Energy, bringing total payments to independent power producers to approximately $392.8 million.
The Ministry of Finance announced it paid about $1.47 billion in the 2025 fiscal year to rescue and restore Ghana’s energy sector. When President John Dramani Mahama assumed office in January 2025, the energy sector had been pushed to the brink by years of persistent non payment for gas supplied to the power sector from the Offshore Cape Three Points (OCTP) field.
As of December 31, 2025, the government fully repaid $597.15 million, inclusive of interest, drawn on the World Bank Partial Risk Guarantee (PRG). The repayment has fully restored the facility and reaffirmed Ghana’s standing as a credible and reliable partner on the global stage, according to the ministry.
The $500 million guarantee established in 2015 had been completely depleted under the previous administration. The PRG was central to mobilizing nearly $8 billion in private investment for the Sankofa Gas Project.
The government also settled all outstanding gas invoices owed to ENI and Vitol for electricity generation, totaling approximately $480 million. Budgetary provisions have been secured to ensure timely payments going forward.
Government engaged upstream producers including Tullow Oil and Jubilee Field partners to agree on a roadmap that guarantees full payment for gas supplied. These engagements have already resulted in increased gas production aimed at improving electricity reliability and reducing dependence on costly liquid fuels.
The IPGs stated that the settlement sends an important signal to both domestic and international investors that Ghana is committed to honoring its contractual obligations and restoring credibility in its power market, at a time when competition for capital across emerging markets remains intense.
Ghana’s power sector has for years struggled with legacy debts arising from power purchase agreements, currency depreciation, excess generation capacity and inefficiencies across the electricity value chain. The accumulation of arrears strained the balance sheets of power producers, increased financing costs and discouraged new investment while complicating government efforts to stabilize electricity supply and tariffs.
Improved payment discipline could lower perceived risk in the sector, helping Ghana attract new financing, technology and long term partnerships needed to modernize generation assets, expand renewable energy and support industrial growth. The power sector is seen as a backbone of Ghana’s broader economic transformation agenda, underpinning manufacturing, mining, digital services and job creation.
The IPGs said renewed confidence in the sector positions Ghana to deepen private sector participation while advancing reforms focused on efficiency, transparency and value for money across the power value chain. A more stable financial environment would also enhance planning for maintenance, fuel procurement and capacity optimization, reducing the risk of supply disruptions.
Beyond clearing inherited arrears, the government has strengthened implementation of the Cash Waterfall Mechanism, helping ensure that most independent power producer invoices for 2025 were paid on time. Government assured the public, industry players and international partners that the era of unchecked energy sector debt accumulation is over, pledging continued discipline to safeguard power sector stability and support industrial growth.
The IPGs reaffirmed their commitment to supporting Ghana’s energy security, economic growth and industrial development. They pledged to continue working closely with government and sector agencies to ensure reliable power supply, promote transparency and deliver value for money.
The group expressed confidence that the cooperation shown in resolving the arrears will strengthen the partnership between government and independent power generators, and help build a stable, sustainable and financially disciplined energy sector for the benefit of all Ghanaians.
