President John Dramani Mahama revealed in his 2026 State of the Nation Address (SoNA) that the Government of Ghana has successfully renegotiated its outstanding obligations to Independent Power Producers (IPPs), securing $250 million in immediate savings and restructuring $1.1 billion in legacy power debt for payment between 2026 and 2028.
He said the move is designed to reduce financial pressures while ensuring long-term stability in the electricity sector. However, a significant portion of the debt still awaits payment, highlighting the ongoing challenge of managing the country’s electricity costs, and any delays could affect operational efficiency and electricity tariffs.
During his address to Parliament, the President stated: “To address the high cost of power, government has successfully renegotiated existing power purchase agreements. Engagement with the nine independent power producers has resulted in $250 million in immediate savings and $1.1 billion of legacy debt restructured for payment between 2026 and 2028.”
The restructuring spreads repayment over three years, from 2026 to 2028, and is designed to relieve the sector’s cash-flow pressures while maintaining uninterrupted power supply. It forms part of broader efforts by the government to stabilise electricity costs, safeguard operations, and ensure that power generation continues to support economic growth.
Beyond renegotiating IPP obligations, President Mahama highlighted other significant measures to strengthen the sector. He noted the full repayment and reinstatement of the $500 million World Bank Partial Risk Guarantee, which safeguards private investments in offshore gas projects and reinforces Ghana’s credibility with international partners. Outstanding gas payments to ENI and Vitol, totaling about $500 million, have also been settled, ensuring reliable gas supply for power generation.
In addition, the government has introduced a Single Holding Account for the Electricity Company of Ghana (ECG), jointly overseen by the Ministry of Energy and the Public Utilities Regulatory Commission, to improve revenue management and reduce losses. Efforts to cut technical and commercial power losses are ongoing, supported by private-sector participation in billing and collection under the Multiple Lease Method.
Access to electricity continues to expand under the Rural Electrification Programme, with 200 of 400 targeted communities now connected, and 35 mini-grids under construction for islands and lakeside communities in the Oti, Savannah, and Bono East regions.
The government is also increasing renewable energy capacity, including solar projects of 50 MW under the Bui Power Authority, 30 MW from rooftop installations, and 200 MWp at the Dawa Industrial Zone, with 100 MWp expected by year-end.
Taken together, these initiatives reflect a comprehensive government strategy to stabilise electricity costs, safeguard supply, expand access, and attract investment, positioning Ghana’s energy sector to meet future demand while managing fiscal pressures.
With the legacy debt restructured and immediate savings secured, the government aims to provide more predictable power costs for consumers, strengthen the sector’s financial sustainability, and attract continued investment in Ghana’s electricity infrastructure. Nonetheless, the remaining debt obligations still pose a challenge, and any delays could impact both operational efficiency and electricity tariffs.
