The Minister for Finance, Cassiel Ato Forson, has announced plans for the construction of a state-owned 1,200-megawatt power plant under Ghana’s renewed Gas-to-Power transformation policy.

Addressing Parliament on Wednesday, February 25, Dr Forson said the large-scale facility will serve as a central pillar of government’s strategy to transition electricity generation from costly light crude oil to domestically produced natural gas.

Gas-to-Power transition

According to the Minister, the policy is designed to significantly reduce generation costs, conserve foreign exchange and strengthen macroeconomic stability.

He noted that shifting from imported fuel to local gas will help cut pressure on the country’s foreign exchange reserves while promoting sustainable reserve accumulation.

Beyond the 1,200MW state-owned plant, government plans include constructing a second gas processing facility and implementing broader reforms in the oil and gas sector to attract fresh upstream petroleum investment.

Cost savings and fiscal relief

The Gas-to-Power transformation policy is expected to reduce electricity generation costs by at least 75 percent, lower carbon emissions within the power sector and ease the fiscal burden on the national budget.

To support the reforms, government has allocated GH¢15.2 billion to address accumulated energy sector shortfall payments. An additional GH¢4.8 billion has been earmarked in 2026 to clear legacy debts owed to Independent Power Producers (IPPs).

The initiative forms part of a broader effort to stabilise Ghana’s energy sector, improve financial sustainability and position the country for long-term industrial growth.