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Ghana is preparing to initiate construction on a 1,200-megawatt (MW) government-owned gas-fired thermal power facility, which will establish itself as the nation’s largest power generation plant, thereby eclipsing the current 1,020-MW Akosombo Hydroelectric Power Station. The investment in a thermal power facility marks a significant step in securing the country’s energy future.
During a community forum with Ghanaian residents in New York on Friday (September 25), President John Dramani Mahama revealed that the administration intends to finalize the agreement for the 1,200-megawatt thermal power plant by year-end 2026.
“We will develop Ghana’s most substantial thermal generation capacity. By the conclusion of this year, we will execute a contract for 1,200 megawatts of gas-based thermal power,” the President stated. Ultimately, this will result in a new government-owned thermal power facility that can support future demand growth.
According to the President, this expanded thermal capacity has become essential in response to worldwide energy transformation, the expansion of renewable energy sources and electric vehicle adoption, and the imperative to prevent stranded investments. Building a thermal power facility is central to this strategy.
The President noted that Independent Power Producers (IPPs), who had previously threatened power disruptions, are now proposing to contribute an additional 500 megawatts of capacity; however, the government has determined that establishing publicly-owned generation capacity is the preferred approach.
Energy sector debt
He said government had cleared the energy sector debts and reorganised the Electricity Company of Ghana (ECG) to prioritise payment of power producers, a move that has stabilised power supply.
“We brought IPPs, and everybody was threatening to switch off power. Today, I can tell you, we have paid off our energy debts. And we are current with the payments.
“We have reorganised the Electricity Company of Ghana. The first charge on any money they collect is to pay the power generators. Instead of procurements, buying cables, street lights that we cannot even use for 10 years, we are measuring their procurements. We are paying the IPPs first,” he said.
According to his statement, when the government assumed control, the oil and gas industry faced significant challenges characterized by pessimism, as major investors like Eni relocated their activities to Côte d’Ivoire and Jubilee output fell to approximately 60,000 barrels daily.
He noted that investor confidence has been successfully restored, evidenced by Jubilee Partners committing $2 billion to develop 20 additional wells and Eni allocating $1.5 billion to complete its Sankofa field development.
“Oil production has increased by nearly 38 percent since 2025,” he stated, noting that prominent petroleum companies such as ExxonMobil and Shell are actively pursuing business opportunities in Ghana.
The President emphasized that the additional gas from these renewed investments would supply the new thermal power facilities and generate increased revenue for national development. This means the thermal power facility will benefit from enhanced natural gas availability.
Economic Stability
Regarding economic progress, President Mahama explained that the government inherited an International Monetary Fund (IMF) programme that had gone off-track but has successfully restored and stabilized it.
He noted that by June 2024, the previous administration had received the subsequent disbursement of the $3 billion facility; however, with fewer than six months remaining before elections, it had not fulfilled its programme obligations.
The President stated that his administration implemented challenging measures before the subsequent IMF review to restore programme compliance.
“We had to act before the next IMF mission arrived to restore the programme to its proper course, which we accomplished. We had to implement various difficult measures, but Ghanaians demonstrated cooperation and shared the burden. By the time the mission arrived, the programme was back on track,” he explained.
He added that beyond the IMF framework, the government implemented independent measures to strengthen fiscal discipline, including legislative amendments, parliamentary bills, and Cabinet resolutions.
President Mahama concluded that these actions have proven effective, with the debt-to-GDP ratio declining more rapidly than anticipated.
Our debt-to-GDP ratio has declined, with projections indicating we will achieve a 45 percent debt-to-GDP target by 2028. I am pleased to report that we have already accomplished this goal by the conclusion of the previous year,
he stated.
Regarding interest rates, he noted that Treasury bill rates have experienced a substantial decrease, falling from 23.4 percent to approximately five percent by year-end.
He further highlighted that the cedi has stabilized following periods of significant depreciation, at one point strengthening by up to 70 percent.
“I recognize your satisfaction with the GHc 17 rate. However, our national currency has stabilized and even declined below 10. Currently, the exchange rate stands at 11.5 to 11.6 in banking institutions, with the foreign exchange rate at approximately 12,” he explained.
President Mahama emphasized that currency stability is vital for business operations and contributes to reduced import costs while promoting economic growth.
“We seek neither an excessively weak nor an excessively strong exchange rate. Rather, the exchange rate is being carefully managed to maintain controlled annual depreciation levels. Consequently, the economy is performing favorably,” he concluded. In summary, building a thermal power facility is central to Ghana’s energy and economic transformation.