Ghana is preparing to construct a 1,200-megawatt (MW) state-owned gas-fired thermal power plant, which is expected to become the country’s largest power generation facility once completed.
The proposed project will surpass the 1,020MW Akosombo Hydroelectric Power Station in installed generation capacity, marking a major development in Ghana’s electricity and energy sector.
President John Dramani Mahama announced the planned investment during a town hall meeting with the Ghanaian community in New York on Friday, September 25, 2026.
According to the President, the government expects to sign an agreement for the 1,200MW thermal power project before the end of 2026.
“We are going to build the biggest thermal capacity in Ghana. Before the end of this year, we’re going to sign 1,200 megawatts of gas thermal power,” President Mahama said.
Ghana Plans Major Expansion of Thermal Power Generation
President Mahama explained that the decision to invest in new gas-fired electricity generation is linked to changes in the global energy market, including the growth of renewable energy and electric vehicles.
He said Ghana must carefully plan its energy investments to avoid developing infrastructure that could eventually become stranded assets as the global energy transition accelerates.
The President also disclosed that some Independent Power Producers (IPPs) that previously threatened to suspend electricity generation are now prepared to invest in an additional 500MW of generation capacity.
However, he said the government would rather develop additional state-owned power generation capacity as part of its long-term energy strategy.
Government Says Energy Sector Debts Have Been Cleared
President Mahama said the government has cleared outstanding energy sector debts and reorganised the Electricity Company of Ghana (ECG) to prioritise payments to power producers.
He said the changes have helped improve confidence among electricity generation companies and contributed to greater stability in the country’s power supply.
According to the President, ECG has been restructured so that payments collected by the company are first used to settle obligations to power generators.
He said the government is also reviewing ECG’s procurement priorities to ensure that available resources are directed towards critical obligations, particularly payments to IPPs.
Ghana Oil and Gas Sector Attracts Fresh Investment
President Mahama also highlighted developments in Ghana’s oil and gas industry, saying investor confidence has improved following a period of declining production and uncertainty.
He said the sector previously experienced significant challenges, including the relocation of some operations by investors such as Eni to Côte d’Ivoire, while production from the Jubilee Field declined to about 60,000 barrels per day.
According to President Mahama, the situation has since changed, with major investments returning to Ghana’s upstream petroleum sector.
He disclosed that Jubilee Partners are investing about US$2 billion to drill 20 new wells, while Eni is investing approximately US$1.5 billion to bring the remaining portion of the Sankofa field into production.
The President said Ghana’s oil production has already increased by almost 38% since 2025.
He added that major international energy companies, including ExxonMobil and Shell, are now exploring investment opportunities in Ghana.
Increased Gas Production to Support Power Generation
President Mahama said the increase in oil and gas investment is expected to provide additional natural gas for Ghana’s growing thermal power generation sector.
The additional gas supply could help fuel the planned thermal power plants while also generating increased revenue for the government to support national development.
The planned 1,200MW facility therefore forms part of a broader strategy linking Ghana’s oil and gas sector, electricity generation and economic development.
President Mahama Updates Ghanaians on IMF Programme
Speaking about Ghana’s economic recovery, President Mahama said his administration inherited an International Monetary Fund (IMF) programme that was off track.
He said the government took a number of difficult measures to restore the programme before the next IMF review mission arrived.
President Mahama noted that Ghana had received the next tranche of the US$3 billion IMF loan programme by June 2024, but said commitments under the programme were subsequently not fully honoured ahead of the 2024 general election.
He said the current administration worked to restore the programme and implement measures aimed at strengthening fiscal discipline and economic stability.
Beyond the IMF programme, the President said government introduced additional measures through legislative amendments, bills submitted to Parliament and Cabinet decisions.
Ghana’s Debt-to-GDP Ratio Declines
President Mahama said the government’s fiscal measures have contributed to a faster-than-targeted reduction in Ghana’s debt-to-GDP ratio.
He said Ghana had initially targeted a debt-to-GDP ratio of 45% by 2028 but claimed the target had already been achieved by the end of the previous year.
The reduction in public debt, according to the President, forms part of the government’s broader efforts to stabilise the Ghanaian economy and strengthen public finances.
Treasury Bill Rates Fall Sharply
President Mahama also highlighted the decline in Treasury bill interest rates, saying rates had fallen significantly from 23.4% to approximately 5% by the end of last year.
Lower Treasury bill yields could reduce the government’s domestic borrowing costs while also affecting returns available to investors in Ghana’s fixed-income market.
The President said the reduction in interest rates reflects improvements in Ghana’s broader macroeconomic environment.
Cedi Exchange Rate Stabilises
The President also addressed the performance of the Ghana cedi, saying the currency has stabilised following periods of significant depreciation.
He said the cedi, which had previously traded at levels as high as about GH¢17 to the US dollar, later appreciated to below GH¢10 before settling at around GH¢11.50 to GH¢11.60 at banks, according to figures he cited.
He added that foreign exchange rates were around GH¢12 at the time of his remarks.
President Mahama said maintaining a relatively stable exchange rate is important for businesses because it can help manage import costs, import duties and inflationary pressures.
He stressed that the government does not want an excessively weak or excessively strong exchange rate, but rather a currency that remains within a manageable range of annual depreciation.
Ghana Energy Sector and Economy Enter New Phase
The planned 1,200MW gas-fired thermal power plant, together with increased investment in Ghana’s oil and gas industry, forms part of the government’s strategy to strengthen electricity supply and support economic growth.
The project is also expected to increase Ghana’s state-owned electricity generation capacity at a time when the country is balancing traditional thermal generation with renewable energy and the broader global transition towards cleaner energy.
Government’s focus on energy sector debt management, ECG reforms, new power generation and upstream petroleum investment is expected to remain central to discussions about Ghana’s energy security and economic development in the coming years.
Source: newsthemegh.com