KEY POINTS
- Ghana cleared $1.47 billion in energy arrears.
- Power producers say liquidity pressures have eased.
- Payments restored confidence in the power market.
Independent power producers in Ghana have welcomed the government’s decision to clear long-standing energy sector arrears, saying the $1.47 billion settlement marks a turning point for financial stability and investor confidence in the country’s power market.
Arrears payment lifts confidence
The Independent Power Generators, or IPGs, said the clearance of $1.47 billion in outstanding obligations by the Mahama-led government has eased pressure across the electricity value chain. In a statement issued on January 12, the group described the payments made in 2025 as a critical step toward restoring confidence in a sector that has struggled with weak cash flows and delayed settlements for years.
According to the IPGs, the payments to independent power producers have reduced severe liquidity constraints that limited operational planning and strained balance sheets. The group said the improved cash position is expected to support more predictable operations and create room for maintenance and investment decisions that were previously deferred. It also commended the Ministry of Finance and the Ministry of Energy for coordinating efforts to settle the arrears.
Breakdown shows wide beneficiaries
A breakdown of the payments shows that several power producers received significant sums. Karpowership Ghana was paid $120 million, while Cenpower Generation received $59.4 million. Twin City Energy Amandi was paid $38 million, Early Power received $42 million, and Sunon Asogli Ghana was paid $54 million.
Other beneficiaries included BXC Company, Meinergy Technology, AKSA Energy and Cenit Energy. The total amount paid directly to independent power producers under this tranche was about $392.8 million, according to figures reviewed by the IPGs.
According to Africa Energy Pulse, the Ministry of Finance said the broader $1.47 billion settlement in the 2025 fiscal year was aimed at stabilising an energy sector that had edged toward financial distress. Persistent non-payment for gas supplied from the Offshore Cape Three Points field had strained relations with suppliers and disrupted electricity generation.
By December 2025, the government had fully repaid $597.15 million, including interest, drawn under the World Bank Partial Risk Guarantee. The repayment restored the facility and reinforced Ghana’s standing with international partners. The government also cleared outstanding gas invoices owed to ENI and Vitol for power generation, totaling about $480 million, and secured budgetary provisions to ensure payments are made on time.
Engagements with upstream producers, including Tullow Oil and Jubilee Field partners, have resulted in agreements to guarantee full payment for gas supplied. The discussions have already supported higher gas output, helping to improve power reliability and reduce reliance on more expensive liquid fuels.
