Ghana is set to embark on one of its most significant power-sector investments in years, with the government announcing plans to begin constructing a 1,200-megawatt state-owned thermal power plant in 2026.

The project forms a central element of the Mahama administration’s long-term energy security strategy and is designed to ensure reliable, affordable electricity for households, businesses and industries across the country.

The announcement was made by the Minister for Finance, Dr. Cassiel Ato Forson, during the presentation of the 2026 Budget Statement and Economic Policy to Parliament.

“In the medium term, a total of 150 million standard cubic feet of gas per day will be produced by our OCTP and Jubilee partners, enough to generate up to 1,200 megawatts of power.”
Minister for Finance, Dr. Cassiel Ato Forson

Addressing lawmakers, Dr. Forson explained that the foundation of the project lies in Ghana’s increasing domestic natural gas output from major offshore fields.

He noted that combined production from the Offshore Cape Three Points (OCTP) and Jubilee partners will soon provide enough feedstock to support a large-scale thermal generation facility.

This anticipated gas volume is a direct result of recent agreements and capacity expansions announced earlier in the year, including the upcoming development of Ghana Gas Processing Plant Two (GPP 2).

With more gas becoming available, government is seeking to ensure that supply is converted into affordable power for national development.

“Beginning 2026, Government will commence the construction of a 1,200-megawatt state-owned thermal power plant to offtake the additional 150 million standard cubic feet of gas per day from the OCTP partners and GPP 2.”
Minister for Finance, Dr. Cassiel Ato Forson

He stressed that the project marks a strategic shift toward strengthening public ownership within the power generation mix.

In recent years, Ghana’s electricity sector has been dominated by Independent Power Producers (IPPs), whose capacity charges and commercial arrangements have contributed to high costs and sectoral financial stress. A state-owned plant, the minister suggested, gives government a stronger tool to manage costs and secure stable supply.

“This plant will support the provision of reliable and affordable power and secure Ghana’s energy future.”
Minister for Finance, Dr. Cassiel Ato Forson

Importance of the Project for Energy Sector

The new power plant is expected to form a central pillar of Ghana’s medium-term economic transformation agenda.

By providing 1,200MW of additional generation capacity, government aims to stabilise the national grid, support industrial expansion and reinforce the emerging 24-hour productive economy.

A reliable supply of gas-fired power also reduces dependence on imported light crude oil, which has historically exposed the country to international price fluctuations and fiscal pressure.

The plant’s reliance on domestic gas therefore strengthens energy independence while lowering generation costs.

The scale of the project positions it among the largest state-led energy investments since the building of the Aboadze Thermal Plant in the 1990s and the Bui Hydroelectric Dam in the 2000s.

The 1,200MW facility is expected to be developed in phases, although full details of financing, timelines and project execution are expected to be provided in subsequent policy updates.

Government Eyes New Hydroelectric Power

Alongside the thermal expansion, Dr. Forson announced that government will begin exploring new opportunities for hydroelectric generation, signalling a more diversified long-term power strategy.

Hydropower, although vulnerable to rainfall variability, remains a key renewable resource for Ghana and a stabilising complement to thermal generation.

“Government will undertake feasibility studies on mini-hydroelectric potential of the Red Volta and other southern river systems.”
Minister for Finance, Dr. Cassiel Ato Forson

The studies will focus on identifying sites suitable for small and medium-scale hydropower installations, which could provide energy to communities not easily served by large grid infrastructure or help offset peak generation needs.

Mini-hydro developments are also seen as a way to promote clean energy while reducing reliance on thermal generation during periods of low demand.

This approach fits into Ghana’s broader climate and energy transition goals, which seek to combine thermal stability with renewable expansion, including solar mini-grids for remote and island communities.

He emphasised that government’s objective is not simply to generate more electricity but to ensure that power remains affordable and consistent for every Ghanaian household and business.

As Parliament prepares to debate the 2026 Budget in the coming weeks, the energy sector is expected to emerge as a major focal point for policy discussions.

The twin strategy of expanding thermal capacity and exploring new hydro opportunities appears poised to shape Ghana’s electricity landscape for the next decade, positioning the country for growth, industrialisation and improved energy security.