Government targets 20% electricity tariff cut from new 1,200MW gas power plant

Government Pushes Ahead with Major Energy Project
The Government has announced plans to develop a 1,200-megawatt (MW) state-owned combined-cycle gas-fired power plant in the Komenda-Edina-Eguafo-Abrem (KEEA) Municipality of the Central Region, a project expected to reduce electricity tariffs by 10% to 20% while creating more than 2,000 direct and indirect jobs. Finance Minister Dr. Cassiel Ato Forson disclosed the initiative during the presentation of the 2026 Mid-Year Budget Review in Parliament on Wednesday, describing it as a key investment in expanding reliable and affordable electricity generation.

Feasibility Studies Confirm Project Viability
According to the Finance Minister, feasibility studies have confirmed the technical and economic viability of the project, while environmental assessments, engineering works and permitting processes are progressing steadily. He announced that the project will be developed in phases, with the first 600MW phase expected to be commissioned in 2028.

Direct Procurement to Cut Costs
Dr. Forson revealed that the government secured the project’s gas turbines directly from GE Vernova, eliminating intermediaries in the procurement process. He said the direct acquisition is expected to reduce equipment costs by 35% to 45%, generating significant savings for the state and improving the project’s overall value.

Lower Generation Costs to Reduce Electricity Tariffs
The Finance Minister explained that the gas-fired power plant forms part of the government’s broader strategy to increase the use of natural gas in electricity generation, thereby lowering production costs. He noted that once completed, the facility is expected to reduce the cost of generating electricity, enabling lower end-user tariffs while strengthening Ghana’s energy security through more reliable domestic power supply.

Government Advances Gas Processing Facility
In addition to the power plant, Dr. Forson announced that the government, in partnership with the private sector, is developing a 100 million standard cubic feet per day modular gas processing facility to support Ghana’s Gas-to-Power strategy. He said land acquisition for the facility has been completed, while environmental assessments, engineering design, financial due diligence and project structuring are ongoing. Financial close is expected before the end of 2026.

Project Expected to Deliver Jobs and Economic Benefits
The planned gas processing facility is projected to create nearly 1,000 jobs and generate approximately US$2 billion in benefits to the state over the next five years. According to Dr. Forson, these gains will come through fuel cost savings, reduced foreign exchange expenditure, taxes, levies and dividends.
Government Eyes Long-Term Energy Security

Dr. Forson said the two projects demonstrate the government’s commitment to strengthening Ghana’s domestic energy infrastructure, improving electricity affordability and supporting sustainable economic growth.
He added that expanding gas-based power generation will play a critical role in ensuring reliable electricity supply while lowering the long-term cost of power for consumers and businesses.