Gov’t making progress in clearing $1.7bn power debt – Mahama

President John Mahama has announced significant progress in addressing Ghana’s long-standing energy sector challenges, revealing that his administration has successfully restructured and begun settling a $1.7 billion debt owed to Independent Power Producers (IPPs).

Speaking on the second day of the Kwahu Business Forum on Saturday, April 4, 2026, President Mahama described the massive, dollar-denominated liability as one of the most pressing financial burdens inherited by his government upon taking office. He noted that the debt had placed considerable strain on Ghana’s power sector, affecting both operational stability and investor confidence.

“When we came into office, we had a debt overhang of about $1.7 billion owed to the independent power producers,” the President stated, highlighting the scale of the challenge.

According to him, the government initiated extensive negotiations with the IPPs aimed at restructuring the debt in a manner that would be sustainable for both the state and the energy producers. These discussions resulted in a mutual agreement in which the IPPs accepted financial concessions as part of a broader national effort to stabilize the economy.

President Mahama explained that the producers agreed to absorb approximately 20 percent of the total debt—commonly referred to as a “haircut”—in alignment with similar sacrifices made by other stakeholders during Ghana’s wider debt restructuring programme.

“Since Ghanaians were all taking haircuts from the debt restructuring, we told them they also must take haircuts… and they agreed… it amounted to about twenty percent of what was owed,” he said.

Following the agreement, the government implemented a structured repayment plan designed to gradually clear the outstanding balance. This plan includes immediate lump-sum payments to participating IPPs, as well as a clearly defined schedule for subsequent payments to ensure transparency and predictability.

“If they signed on to it, we gave them an immediate down payment, and we gave them the dates for the subsequent payment,” President Mahama added.

Beyond the restructuring of legacy debt, the President emphasized what he described as the most critical achievement: the government’s renewed ability to consistently meet its current financial obligations to power producers. He noted that timely payment for ongoing electricity generation is essential for maintaining stability in the sector.

“The best announcement is [that] we are keeping up with their present-day bills… any bill they submit every month, we pay them for the electricity they produce,” he stressed.

He further explained that this improved payment discipline represents a major step toward rebuilding trust between the government and Independent Power Producers. By ensuring reliability in financial transactions, the administration aims to strengthen partnerships within the energy sector and encourage continued investment in power generation.

President Mahama indicated that these reforms are expected to ease financial pressure on IPPs, many of whom have faced liquidity challenges due to delayed payments in the past. Additionally, the measures are likely to enhance the overall resilience of Ghana’s electricity supply chain, reducing the risk of disruptions and supporting consistent power delivery to businesses and households.

The President concluded by reaffirming his administration’s commitment to maintaining fiscal discipline in the energy sector, noting that sustained reforms will be crucial to securing long-term energy stability and economic growth.