Ghana Plans 1,200 MW Gas Plant as Power Sector Costs Mount

AFRICAN BUSINESS AND ECONOMYAugust 30, 2026 at 4:20 PM UTC

TLDR

Ghana embarks on building a 1,200-megawatt gas-fired power plant to enhance electricity supply and decrease costs.
State-owned project in Central Region to surpass the Akosombo hydroelectric facility with the first phase set to operate by 2028.
Investment aims to reduce financial losses in the electricity sector, targeting a decline in electricity tariffs and promoting gas-based generation.

Ghana is moving ahead with a 1,200-megawatt gas-fired power plant as the government seeks to improve electricity supply and reduce costs that continue to weigh on public finances. The state-owned project will be built at Kafodzidzi-Abrobeano in the Central Region and would become the country’s largest power plant, exceeding the 1,020-megawatt Akosombo hydroelectric facility.

Finance Minister Cassiel Ato Forson said feasibility studies have confirmed the project’s viability, while environmental, engineering and permitting work is under way. The first 600-megawatt phase is expected to begin operating in 2028. Ghana has secured gas turbines from GE Vernova, with the government estimating savings of 35% to 45% compared with buying the equipment through third parties.

The investment comes as Ghana tries to reduce financial losses in its electricity industry. The World Bank estimates that delays in energy-sector recovery programmes cost the country about $1 billion each year. The International Monetary Fund expects the sector’s financing shortfall to reach about $1.1 billion in 2026, reflecting collection losses, distribution problems and power-generation contracts.

The government says the new plant could reduce generation costs and support a 10% to 20% decline in electricity tariffs. It is also developing a gas-processing facility capable of handling 100 million standard cubic feet a day. Ghana has shifted more thermal generation from liquid fuels to natural gas, a move the government says saved about $500 million over the past year.

Financing remains a challenge. Forson has called for guarantees, blended finance, local-currency funding, capital markets and public-private partnerships to support energy investment. Ghana is trying to expand generation while continuing fiscal reforms following its debt crisis, limiting how much new infrastructure can be funded from the government budget.

Points clés à retenir

Ghana’s problem is not only whether it can generate enough electricity, but whether it can produce and distribute power at a cost that consumers and the government can afford. The country has spent years dealing with unpaid bills, losses at utilities and contracts that require payments even when power is not needed. The energy-sector shortfall was about $1.4 billion in 2025 and is expected to remain above $1 billion in 2026. Ghana has made some progress: the government says it has paid about $1.47 billion of legacy energy debt, improved payments to independent producers and saved about $500 million by replacing imported liquid fuel with domestic gas. A 1,200-megawatt plant could build on that shift if gas supply remains available and its generation costs are below existing alternatives. But adding capacity alone will not fix the sector. Ghana also needs utilities to collect more revenue, reduce distribution losses and maintain tariffs that cover more of the cost of electricity. Financing the plant without adding pressure to public debt will be another test. That explains the government’s push for private capital and blended-finance structures rather than relying only on state borrowing.

Ghana