A new report from the Centre for Research on Multinational Corporations (SOMO) and ActionAid Ghana exposes how World Bank-backed projects have prioritised corporate profits while draining Ghana’s public funds.
The World Bank Group must be held accountable for the devastating consequences of its energy policies in Ghana.
Instead of fostering sustainable growth, the Bank has locked the country into crippling debt, energy insecurity, and fossil fuel dependency.
A Rigged Energy System That Benefits Corporations, Not Ghanaians
Through controversial lending and questionable financial guarantees that shield foreign investors, the World Bank has played a key role in burdening Ghana with obligations it cannot afford.
The country has paid for gas it could not immediately use and continues to pay for expensive excess electricity it doesn’t need, all while struggling to provide affordable energy for its people.
“The World Bank claims to champion development. In Ghana, it has done the opposite—fueling debt while ensuring corporate profits come before public need,” says Joseph Wilde-Ramsing, acting Executive Director of SOMO. “Ghanaians are paying high prices for electricity they can’t afford, while foreign oil and gas companies reap guaranteed profits.”
West African Gas Pipeline: A Broken Promise
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: Billions Spent, Power Shortages Remained
Led by oil multinationals Tullow Oil and Kosmos Energy, the Jubilee project was hailed by Western investors also for its potential to ease Ghana’s power crisis. However, this multibillion-dollar project didn’t 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 $1 billion in additional fuel imports. Meanwhile, foreign investors received hundreds of millions in World Bank-backed loans and guarantees.
Sankofa Gas Deal: A Highly Risky Deal Disguised as a Solution
With over $1.2 billion in World Bank commitments, the Sankofa project was hailed by the Bank as a breakthrough for Ghana’s energy security.
However, its take-or-pay contract compelled Ghana to pay $600 million annually for gas, whether it used it or not. Infrastructure delays meant that $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 recover $360 million in missed payments, converting this amount into burdensome loans for Ghana.
Independent Power Producers: Excess Power, Excess Costs
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. 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 $1.3 billion revenue shortfall in 2023.
The World Bank: Aiding Development or Profiting from Ghana’s Debt?
Ghana’s debt was restructured under the G20 Common Framework for Debt Treatments, but this involves simply postponing debt with bilateral creditors ($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 $4.75 billion owed to the World Bank, is exempt from the process.
The World Bank issued a new $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.
Without tackling disastrous take-or-pay contracts, Ghana risks remaining stuck in a cycle of fossil energy debt, further threatening struggling households who, following the IMF bailout, have already been hit by the doubling of electricity tariffs in 2023.
“Ghana has been compelled to enter into energy agreements that are unaffordable and unsustainable,” says John Nkaw, Country Director of ActionAid Ghana. “These contracts seem to guarantee profits for oil giants while our government struggles to pay off debts. The burden falls on ordinary Ghanaians, who must endure high electricity prices while the promised energy benefits remain unfulfilled.”
A Call for Accountability and Fair Energy Deals
Ghana’s experience underscores the urgent need for greater transparency and fairness in global energy investments. All energy contracts that shift financial risk onto the country must be reassessed,and development finance institutions like the World Bank must acknowledge their role in fueling this crisis.
A first step towards real accountability would be an independent process that assesses the historical and current levels of fossil-related debt affecting Ghana’s finances, followed by the cancellation of this debt as part of the ongoing restructuring process led by the International Monetary Fund.
“Instead of guiding Ghana towards sustainable energy solutions, the World Bank has locked the country into disastrous, high-risk contracts that benefit fossil fuel corporations at the expense of the people. This is utter negligence, exploitation, and a climate disaster rolled into one,” concludes Joseph Wilde-Ramsing, acting Executive Director of SOMO.