IN SHORT: Ghana’s President John Dramani Mahama announced on May 2 that the government will break ground before end-2026 on a new 1,200-megawatt gas-fired power plant, the country’s largest single capacity addition in years, to address a demand surge from 3,500MW when he took office in 2025 to 4,300MW today. The plant will be state-owned, reversing two decades of independent power producer dominance. It will use gas from offshore Jubilee and OCTP fields and target electricity exports to Burkina Faso. The announcement follows a fire at the GRIDCo Akosombo control room that knocked out 1,000MW in late April.
Ghana is building a state-owned 1,200-megawatt gas power plant for the first time in two decades, reversing a policy orthodoxy that handed electricity generation entirely to independent producers while demand has surged 23% in one year and a single fire at a control room wiped out a quarter of installed capacity.
President Mahama announced the project on May 2 during a town hall in Koforidua as part of his Resetting Ghana tour of the Eastern Region, saying the government would break ground before the end of 2026.
- Peak electricity demand has risen from approximately 3,500MW when Mahama took office in January 2025 to 4,300MW today, driven by expanding industrial activity, commercial growth, and the investment surge that has accompanied Ghana’s macroeconomic recovery. Adding 1,200MW would bring total installed capacity to approximately 6,000MW, creating meaningful headroom above current peak demand for the first time in years.
- The plant will be state-owned, marking a structural reversal of the independent power producer model that has dominated Ghana’s generation sector since the late 1990s. Finance Minister Cassiel Ato Forson had flagged the project in the 2026 budget in November 2025. The plant will be fuelled by an additional 150 million standard cubic feet of gas per day from Ghana’s offshore Jubilee and OCTP fields, supplied through the accelerated development of the Ghana Gas Processing Plant 2 (GPP-2).
- Mahama explicitly cited export ambitions. Beyond meeting domestic demand, the additional capacity will allow Ghana to supply electricity to neighbouring countries, particularly Burkina Faso, through the West African Power Pool grid, generating foreign exchange at a time when the country is actively rebuilding its reserves base.
- The announcement follows a crisis that exposed how fragile Ghana’s power infrastructure remains despite its macroeconomic recovery. A fire at the Ghana Grid Company control room at Akosombo in late April knocked out approximately 1,000MW, roughly 25% of installed capacity, forcing widespread outages across Accra, Kumasi and other regions. Mahama praised local GRIDCo engineers who restored all six units without recourse to expatriate expertise. Energy Minister John Jinapor described the incident as “one of the most serious disruptions ever recorded.”
- The power sector’s financial position remains precarious. It recorded a $2.2 billion deficit in 2024 despite $2.1 billion in public transfers. Without structural reforms, the IMF has projected cumulative sector debt could exceed $9 billion by end-2026. The Electricity Company of Ghana recovers only 62% of the energy it purchases, a commercial loss rate that makes the sector structurally loss-making regardless of the generation capacity added.
- Africa Sustainable Energy Centre warned in April that continued power outages could cost Ghana up to $2 billion annually in economic losses, hitting manufacturing, healthcare, education and SMEs hardest. Ghost power, the electricity that ECG purchases but cannot bill or collect, is the core of the sector’s dysfunction, and the new plant does not address it directly.
- The government separately announced an Energy Sector Recovery and Green Transition Plan, which will include substation upgrades, renewable energy procurement and rural electrification expansion, alongside the gas plant.
Mahama: “Looking at how the country is growing, the consumption of electricity is increasing. When we came to power, consumption was about 3,500 megawatts. As I speak, our peak consumption is about 4,300 megawatts due to increased investment and demand.”
The Bigger Picture: Ghana’s power story in 2026 is both encouraging and cautionary. The macroeconomic recovery is real, demand is surging, and the government is investing in new capacity. But the sector’s $2.2 billion deficit tells a parallel story: you can build all the megawatts you want, and if ECG collects only 62 cents for every dollar of power it buys, the new plant makes the deficit larger, not smaller. The 1,200MW plant is necessary. It is not sufficient. The Akosombo fire is the reminder that Ghana’s grid vulnerability is not just about generation but about transmission, distribution, and the institutional capacity to maintain critical infrastructure reliably. Fixing the commercial losses is the unglamorous work that determines whether the plant announcement is transformative or expensive.
Source: MyJoyOnline / Ghanaian Times via AllAfrica / Ecofin Agency, May 2-4, 2026
