A new report by the Centre for Research on Multinational Corporations (SOMO) and ActionAid Ghana has revealed that some World Bank-backed energy projects have trapped the country in unsustainable fossil fuel dependency and crippling debt.
The report therefore called for a cancellation of fossil fuel debts and an independent review of all energy-related contracts.
Also, transparency in future negotiations, and stronger governance frameworks that prioritise affordable, sustainable energy solutions.
According to the report, more than US$2 billion of World Bank funding in Ghana’s oil and gas sector has prioritised corporate profits over public welfare, contributing to a debt burden that drains over US$1 billion annually from public finances.
The findings noted that instead of delivering affordable, sustainable energy, the projects—marred by poor contract terms and financial guarantees for foreign investors—have saddled the country with expensive take-or-pay obligations and excess capacity it does not need.
“The World Bank claims to champion development. In Ghana, it has done the opposite—fueling debt while ensuring corporate profits come before public need. Ghanaians are paying high prices for electricity they cannot afford, while foreign oil and gas companies reap guaranteed profits,” Joseph Wilde-Ramsing, acting executive director of SOMO said.
The report cited key projects such as the West African Gas Pipeline, the Jubilee Oil Field development, and the Sankofa Gas Project.
“The West African Gas Pipeline, one of the first major regional energy public-private partnerships, was meant to ensure a steady supply of affordable gas from Nigeria. Instead, since its launch in 2010, gas deliveries have been inconsistent, forcing Ghana to import costly liquid fuels that the pipeline was meant to partially offset. Meanwhile, international oil giants like Shell and Chevron have enjoyed World Bank-backed financial guarantees, insulating them from financial risks.
“Jubilee Project: Led by oil multinationals Tullow Oil and Kosmos Energy, was hailed by Western investors also for its potential to ease Ghana’s power crisis. However, this multibillion-dollar project did not cover the use of gas, and the offshore production facility failed to function properly, leading to years of massive gas flaring. Ghana had to borrow heavily from China to develop onshore gas infrastructure —a delay that cost the country at least US$1 billion in additional fuel imports. Meanwhile, foreign investors received hundreds of millions in World Bank-backed loans and guarantees,” it stated.
For the Sankofa Gas Deal, the report noted that “With over US$1.2 billion in World Bank commitments, the Sankofa project was hailed as a breakthrough for energy security, however, its take-or-pay contract compelled Ghana to pay US$600 million annually for gas, whether it used it or not.”
It added that infrastructure delays meant that US$50 million worth of gas per month went largely unused for over a year, with possible cost recoveries estimated by 2025 only.
“In the meantime, the World Bank’s guarantees helped European oil companies to recover US$360 million in missed payments, converting this amount into burdensome loans for Ghana,” it added.
On the Independent Power Producers, it stated that “between 2012 and 2016, Ghana rushed into independent power producer contracts to address power shortages. Many of these deals—some directly backed by the World Bank—were signed without public scrutiny and included rigid take-or-pay clauses.
The report also has it that “by 2022, Ghana had 850MW of surplus thermal power capacity but remained locked into expensive contracts that far exceeded actual demand, leading to an estimated US$1.3 billion revenue shortfall in 2023”.
“Ghana’s debt was restructured under the G20 Common Framework for Debt Treatments, but this involves simply postponing debt with bilateral creditors (US$5.2 billion) to 2040 – while some of these governments’ banks had invested in the country’s fossil and power projects. Moreover, debt owed to multilateral banks, including US$4.75 billion owed to the World Bank, is exempt from the process.
The World Bank issued a new US$250 million loan in June 2024, primarily aimed at reducing transmission losses, improving planning and expanding the use of metering systems. However, this fails to address the bigger structural problems, such as the renegotiation of expensive power charges and excessive installed capacity under the current agreements with independent power producers, some of which the Bank directly encouraged”.
Poor contract negotiations
John Nkaw, Country Director of ActionAid Ghana, emphasised that poor contract negotiations and a lack of energy governance have significantly contributed to the crisis.
“Ghana now spends between US$1 billion and US$1.5 billion annually to service these energy-related debts—funds that could have supported critical sectors like education and healthcare,” he said in an interview.
He added that while the government bears responsibility for agreeing to such terms, multilateral institutions like the World Bank and African Development Bank must also be held accountable for supporting these deals without ensuring people-centered safeguards.
“The World Bank conducts reviews, but the depth and focus on the welfare of ordinary Ghanaians have been lacking. They should not just be ensuring financial viability for investors, but also social viability for the citizens,” he said responding to whether the report is not blame shifting.
“We are pushing for a broader coalition, including civil society, traditional authorities, and youth organisations, to advocate for cancelling these unjust debts. Moreover, we need a strategic shift toward renewable energy investment to build a resilient, clean, and affordable energy system,” Mr. Nkaw said.
Governance reforms
For his part, Dr. Charles Gyamfi Ofori, Policy Lead on Climate Change and Energy Transition at the Africa Centre for Energy Policy (ACEP), has emphasised the need for urgent reforms in the governance of the country’s extractive and energy sectors.
Dr. Ofori stressed that multilateral institutions like the World Bank are primarily to blame for the sector’s woes, the responsibility lies with Ghana’s own governance systems.
He added that while the World Bank has provided critical support for projects in the energy landscape,the mismanagement of the sector remains a domestic problem that requires strong political will and institutional accountability to fix.
