Ghana’s power sector is under mounting pressure as Early Power and N-Gas Limited have both threatened to cut electricity and gas supply over massive unpaid debts owed by the Electricity Company of Ghana (ECG) and the Volta River Authority (VRA).
Early Power, one of Ghana’s key electricity providers, has issued a final warning to ECG, demanding urgent payment of an outstanding debt of $48,215,405.89, of which $47,249,898.93 is already overdue. In a letter addressed to ECG’s Acting Managing Director on Friday, February 28, 2025, the company expressed frustration over ECG’s prolonged failure to meet its financial commitments.
“As a result of ECG’s default in payment, the Seller finds itself in a precarious financial position and will not be able to meet its debt service obligations and operating costs,” the letter stated.
Early Power has set a strict deadline of February 28, 2025, for ECG to settle the overdue amount, warning that failure to comply would trigger measures under the Power Purchase Agreement (PPA) and the Power Compact Operations Agreement (PCOA), which could lead to supply disruptions.
At the same time, N-Gas Limited has also signaled an impending shutdown of gas supply to Ghana, citing unpaid arrears exceeding $75 million owed by the VRA.
In a letter to VRA’s Managing Director on Tuesday, February 18, 2025, N-Gas disclosed that despite repeated assurances from VRA, no payments had been made. The company stated that it had continued to supply gas even though it had been unable to pay its own gas suppliers and transporters since November 2024, putting immense strain on the energy value chain.
“However, VRA’s action could soon result in gas supply and transportation reliability issues,” the letter warned.
N-Gas also accused VRA of failing to fulfill a $25 million payment commitment by February 21, 2025, breaching the Takoradi Gas Sales Agreement (TGSA).
Citing key clauses in the agreement, the company announced its intention to remove the stay order on the Standby Letter of Credit (SBLC) and proceed with calling on it by Monday, February 18, 2025. Furthermore, effective March 6, 2025, N-Gas will halt gas supply to VRA under Clause 13.6(a) of the TGSA, which allows suppliers to cut off gas flow in the event of non-payment.
To prevent future defaults, N-Gas is now considering a one-month pre-payment requirement for VRA before resuming gas supply.
This latest development further compounds Ghana’s ongoing economic challenges, with the country’s public debt currently standing at GHS721 billion. Several state-owned enterprises, including ECG—which is grappling with a GHS68 billion debt burden—are also in financial distress.
With both Early Power and N-Gas on the brink of suspending supply, Ghana’s energy security is at serious risk. If no urgent interventions are made, power shortages and blackouts could severely impact industries, businesses, and households already struggling with unreliable electricity supply.
