Ghana avoids power disruption after Karpowership reaches debt agreement

Ghana has averted a potential power crisis after Karpowership suspended plans to shut down its operations in May, following successful negotiations with the government over a $400 million debt.

The agreement ensures the continued supply of approximately 450 megawatts of electricity to the national grid, easing immediate concerns over power stability.

Energy and Green Transition Minister John Abdulai Jinapor confirmed that both parties have agreed on a structured repayment plan, leading to the withdrawal of the earlier shutdown notice.

He noted that the government is actively managing the country’s broader energy sector debt, which continues to weigh heavily on Ghana’s fiscal position and electricity supply chain. According to the Minister, the $400 million debt is part of legacy obligations that have complicated ongoing sector reforms.

Dr. Jinapor added that government engagement with Karpowership reflects a broader strategy of active liability management and stakeholder negotiation to maintain power supply while addressing arrears.

The shutdown threat had emerged after Karpowership signalled its intention to halt operations due to non-payment.

Ghana’s energy sector currently carries an estimated $3.1 billion in outstanding debt, including about $1.7 billion owed to Independent Power Producers, alongside roughly GH¢2 billion in monthly revenue shortfalls stemming from under-recoveries by the Electricity Company of Ghana.