US$1.1bn Power Sector Debt Restructured, US$250m Saved – Mahama
By Praisebell Rosemond Larbi
President John Dramani Mahama has announced that government has secured US$250 million in immediate savings following the successful renegotiation of Power Purchase Agreements (PPAs) with nine Independent Power Producers (IPPs).
Delivering his 2026 State of the Nation Address in Parliament, the President disclosed that beyond the immediate savings, government has also restructured US$1.1 billion in legacy debt for payment between 2026 and 2028.
“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 dollars in immediate savings and 1.1 billion dollars of legacy debt restructured for payment between 2026 and 2028,” President Mahama stated.
He added that the revised agreements will be submitted to Parliament for ratification in accordance with constitutional and legal requirements.
According to the President, the renegotiation forms part of broader reforms aimed at tackling structural inefficiencies and financial imbalances within Ghana’s energy sector. The high cost of capacity charges and legacy debts, he noted, has placed significant strain on public finances and contributed to upward pressure on electricity tariffs.
By securing more favourable terms under the revised PPAs, government aims to reduce the financial burden on the state, improve liquidity within the power sector, and enhance long-term sustainability.
The US$250 million in immediate savings is expected to provide fiscal relief, while the restructuring of US$1.1 billion in legacy debt spreads repayments over a more manageable timeline between 2026 and 2028. This approach, the President explained, will ease short-term budgetary pressures without undermining Ghana’s commitments to its energy partners.
Energy sector analysts say the move could help stabilise the sector’s balance sheet, improve investor confidence, and create room for further reforms, including operational efficiency measures and enhanced revenue collection.
President Mahama stressed that ensuring reliable and affordable electricity remains central to Ghana’s industrialisation drive and economic recovery strategy.
The renegotiated agreements, once ratified by Parliament, are expected to strengthen the financial sustainability of the power sector while safeguarding Ghana’s energy security under revised and more balanced contractual terms.
