The government has announced plans to procure 1,200 megawatts (MW) of combined-cycle thermal power capacity by 2029 as part of efforts to reduce electricity costs, improve power reliability and strengthen the financial sustainability of Ghana’s energy sector.
The initiative, according to the Minister for Energy and Green Transition, Dr John Abdulai Jinapor, is expected to significantly increase Ghana’s domestic power generation capacity while helping to lower the cost of electricity for households, businesses and industries. Dr Jinapor disclosed the plan while speaking at the 2026 Future of Energy Conference, where he outlined government’s strategy for addressing the country’s persistent power sector challenges.
He said the government had adopted an ambitious programme to develop additional thermal generation capacity using combined-cycle technology, with the project expected to be completed by 2029. The Minister described the proposed 1,200MW capacity as a potential game-changer for Ghana’s energy sector, particularly as the country seeks to establish a more reliable and financially sustainable electricity supply system.
According to him, expanding domestic generation capacity would be critical to reducing the cost of power and improving the competitiveness of Ghanaian businesses and industries. “Domestic generation capacity is crucial,” Dr Jinapor said, stressing that Ghana needed to develop sufficient capacity to meet its growing electricity requirements without exposing the sector to unsustainable financial commitments.
Despite the planned expansion, the Energy Minister acknowledged the difficulty of meeting Ghana’s electricity needs between now and 2029 without creating excess generation capacity. He explained that government needed additional power in the short term, but any interim arrangement had to be carefully designed to avoid creating financial obligations that could become burdensome once the new 1,200MW plants became operational.
Dr Jinapor said the ministry was therefore engaging energy sector stakeholders and experts to develop an appropriate interim power arrangement. The objective, he explained, was to ensure that Ghana could meet its immediate electricity requirements while avoiding costly long-term commitments that could undermine the financial position of the power sector.
The government’s approach reflects the need to strike a balance between ensuring adequate electricity supply in the short term and preparing for a substantial increase in domestic generation capacity by 2029. The proposed thermal power expansion forms part of broader measures being implemented by the government to restore financial stability to the energy sector.
Dr Jinapor disclosed that government had already paid $1.7 billion in inherited debts owed to Independent Power Producers (IPPs). He said the payment had helped improve the relationship between the government and power producers while addressing some of the financial challenges that have affected the sector.
The government has also restored the World Bank guarantee, which the Minister said was an important step towards strengthening confidence in Ghana’s energy sector. Beyond the settlement of outstanding debts, Dr Jinapor said negotiations with IPPs had enabled government to secure savings of approximately $250 million.
The savings are expected to contribute to efforts to reduce the financial burden associated with electricity generation and improve the overall efficiency of the sector. The Minister also highlighted the financial benefits of Ghana’s ongoing transition from liquid fuels to natural gas for thermal power generation. According to Dr Jinapor, the shift to natural gas generated approximately $500 million in savings during the previous year.
The savings were largely attributed to reduced expenditure on fuel imports, as natural gas provides a more cost-effective fuel option for operating thermal power plants. The transition is also expected to contribute to greater energy security by reducing Ghana’s exposure to fluctuations in the international prices of liquid fuels.
Dr Jinapor indicated that government would continue to pursue measures aimed at improving the efficiency of power generation while ensuring that the country has adequate and affordable fuel supplies for its thermal plants. The planned 1,200MW combined-cycle thermal project is expected to play a significant role in government’s broader strategy to transform Ghana’s power sector.
The additional capacity would provide greater flexibility in meeting rising electricity demand, particularly as economic activity and industrial production expand. For businesses, reliable and competitively priced electricity remains essential to reducing production costs and improving competitiveness.
For households, efforts to reduce the cost of generation could eventually help ease pressure on electricity tariffs, although the impact on tariffs will also depend on other factors, including transmission and distribution costs, sector debts and regulatory decisions. The government is therefore seeking to address the challenges across the power sector rather than focusing solely on generation capacity.
Dr Jinapor said the government would continue implementing measures designed to improve efficiency, strengthen energy security and establish a financially sustainable electricity system.
The 2029 target represents a significant expansion of Ghana’s thermal generation capacity and forms part of efforts to ensure that the country can meet future electricity demand without repeating the financial challenges associated with poorly structured power purchase commitments.
With the planned investment, debt restructuring, IPP negotiations and increased use of natural gas, government is hoping to create a power sector capable of delivering more reliable electricity at a lower cost while supporting economic growth and industrial development.
Philbert Amiba Ayuusah