Ghana Energy Sector Overview

One of Ghana’s paramount constraints to economic growth is the unreliable and inadequate supply of electric power. The country has 2,450 mega-watts (MW) of installed generation capacity, including 546 MW of generation from independent power producers (IPPs). But actual availability hardly exceeds 2000 MW. This serves a population of 25 million that is growing at 2.1% per year. An existing thermal power plant is being re-fitted as a ‘combined-cycle’ facility that will run on natural gas and oil, generating an additional 110 MW. Another IPP, CenPower/Kpone, reached financial close in November 2014, and ultimately will produce 348 MW. These increases in capacity aid the Government of Ghana (GOG) to partly achieve its target of 5,000 MW of installed generation by 2016, including 10% from renewable sources.

Reforms across the power sector will be necessary for Ghana to scale-up private-sector investment. Thus, Power Africa and other partners focus on the following priorities: (1) building a transparent framework for the development and management of Ghana’s substantial natural gas resources; (2) initiating a least-cost, transparent approach to generation expansion including competitive bidding; (3) effective allocation and pricing of legacy hydropower; (4) integrated resource and resiliency planning among the generation, transmission, and distribution sectors; (5); improved energy efficiency and demand-side management; and (6) expansion of renewable energy sources.

Power Africa Support

The U.S. Government is working closely with the GOG on several key power and energy initiatives including the Partnership for Growth and the Millennium Challenge Corporation (MCC). In August 2014, the MCC, a critical Power Africa partner, and the GOG signed a $498.2 million second compact that focuses strictly on power. The compact’s keystone project aims to improve the creditworthiness of the Electricity Company of Ghana (ECG) and of the Northern Electricity Distribution Company (NEDCO), the nation’s off-takers and distributors of electric power, by supporting the transformation of their management and operation to private sector principles. USAID supported GOG’s implementation of a near-term Gas Action Plan to stimulate the production and processing of domestic natural gas. Emphasis is now shifting to support activities outlined in a longer-term Gas Master Plan that considers in addition to accelerating indigenous gas development, the importation of liquified natural gas (LNG) as a supplementary fuel for Ghana’s thermal generation plants. In the generation sector, Power Africa technical assistance (TA) to Ghana helped bring the CenPower/Kpone IPP transaction to financial close. Currently, TA are supporting GOG in negotiations for reasonable tariffs in power purchase agreements for several IPPs with a total of 2,280MW.

Power Africa Contact for Ghana

Robert Buzzard
Email: robuzzard@usaid.gov

Power Africa Coordinator

Andrew Herscowitz
Email: powerafrica@usaid.gov
Follow on Twitter: @aherscowitz

Related Links

• Country Memorandum of Understanding (MOU)

• Investment Guide

• Fact Sheet