A latest report released by the Centre for Research on Multinational Corporations (SOMO) and ActionAid Ghana has revealed how World Bank-funded fossil fuel projects have contributed to Ghana’s crippling debt and energy insecurity, while guaranteeing profits for foreign oil and gas corporations.
According to the report, over $2 billion of World Bank financing has gone into oil and gas projects in Ghana, including controversial investments in the Jubilee and Sankofa fields. These investments have imposed long-term financial burdens on Ghana’s public purse through rigid “take-or-pay” contracts and expensive power agreements.
“The World Bank claims to champion development. In Ghana, it has done the opposite—fueling debt while ensuring corporate profits come before public need,” said 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.”
One of the earliest World Bank-backed energy initiatives, the West African Gas Pipeline, was designed to provide Ghana with reliable and affordable gas from Nigeria. However, gas deliveries have been inconsistent since the pipeline became operational in 2010, forcing Ghana to rely on more expensive liquid fuels.
The Jubilee oil project, led by multinationals Tullow Oil and Kosmos Energy, was heralded as a solution to Ghana’s power challenges. Instead, it led to years of gas flaring and pushed Ghana to borrow heavily from China to develop onshore gas infrastructure. The report estimates that the delays and inefficiencies associated with the project cost the country over $1 billion in extra fuel imports.
SOMO and ActionAid Ghana singled out the Sankofa gas project as one of the most damaging. Despite the World Bank committing $1.2 billion, the project forced Ghana into an inflexible contract that required it to pay $600 million annually for gas—regardless of whether it was used. Due to infrastructure delays, the country was paying for $50 million worth of unused gas every month for over a year.
“Ghana has been compelled to enter into energy agreements that are unaffordable and unsustainable,” said 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.”
Between 2012 and 2016, Ghana also entered into numerous agreements with independent power producers (IPPs), some with World Bank support. These contracts included take-or-pay clauses and were signed without proper public scrutiny. By 2022, Ghana had a surplus of 850MW of thermal power capacity but was locked into overpriced contracts that far exceeded demand, resulting in an estimated $1.3 billion revenue shortfall in 2023.
The report criticized the World Bank’s June 2024 $250 million loan to Ghana, noting that while it targets technical improvements in transmission and metering, it fails to address fundamental structural problems like excessive installed capacity and exorbitant power charges.
“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,” Wilde-Ramsing stressed.
Source: Ghana/StarrFM 103.5FM/Joshua Kodjo Mensah
