Government to sign deal for 1,200MW state-owned gas power plant by year-end – Mahama

President John Dramani Mahama has announced plans for the government to sign an agreement before the end of 2026 for the construction of a 1,200-megawatt (MW) state-owned gas-fired thermal power plant.

According to the President, the project will form part of efforts to expand Ghana’s power generation capacity and ensure a reliable electricity supply while the country responds to changes in the global energy landscape.

President Mahama said the government was mindful of the global shift towards renewable energy and the increasing adoption of electric vehicles in making long-term decisions on power infrastructure.

He explained that government was therefore seeking to balance the need for additional generation capacity with the risk of investing heavily in infrastructure that could become stranded as countries transition to cleaner sources of energy.

“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.

He made the announcement during a town hall meeting with the Ghanaian community in New York.

The President said gas-fired generation remained important to Ghana’s electricity supply, particularly as the country works to maintain reliable power while gradually adjusting its energy mix.

The proposed project comes amid ongoing efforts by the government to address financial challenges in the energy sector, including debts owed to independent power producers (IPPs).

President Mahama said government had cleared the accumulated energy-sector debts and was now current on its payments to IPPs.

“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,” he said.

He further disclosed that the Electricity Company of Ghana (ECG) had restructured its revenue collection arrangements to improve the flow of funds to power producers.

Under the new arrangement, revenue collected from electricity consumers is expected to be channelled more effectively towards payments to power generators.

President Mahama said the measure would help strengthen the financial sustainability of the electricity supply chain and ensure that power producers receive timely payments.

He said this would also help reduce the risk of disruptions to electricity generation arising from payment challenges.

The planned 1,200MW facility is expected to add significant state-owned generation capacity to Ghana’s power system as the government pursues measures to improve the financial and operational stability of the energy sector.