Policy, Power, and the $20 Billion Question: Accra Street Journal's Brief on Ghana's Energy Transition

Let me start with a number that should worry every Ghanaian who pays electricity bills or runs a business that depends on reliable power. Fifty-two percent. That is how much of the energy injected into the national grid is actually paid for. The rest is lost to technical inefficiencies, illegal connections, meter tampering, and simple non-payment. That is not a problem. That is a crisis. And it is the single biggest obstacle to Ghana's ambitious plan to triple renewable energy from 4 percent to 10 percent by the end of this year and reach 30 percent by 2035. You can build all the solar plants you want. You can install all the wind turbines. But if the utility company that buys that power cannot collect payment from its customers, the model collapses. The government knows this. The investors know this. And the question is whether the execution can finally match the ambition.

Let me walk you through where Ghana stands on energy today, because the Accra Street Journal's Reports are more complicated than the headlines suggest.

First, the good news. Ghana has committed to a serious energy transition under the National Energy Compact, launched by President Mahama at the Bloomberg Philanthropies Global Forum in New York in September 2025. That Compact, part of the continent-wide Mission 300 initiative to connect 300 million Africans to electricity by 2030, includes four specific commitments. Increase renewable energy share to 10 percent by 2026 and 30 percent by 2035. Mobilise $20 billion for grid modernisation, renewable projects, and energy efficiency. Reduce over-dependence on wood fuel for cooking, which currently stands at 72 percent. Link energy access to jobs and economic development. These are not vague promises. They are measurable targets with deadlines.

Energy Minister John Abdulai Jinapor stated that the blueprint positions Ghana to attract $20 billion in investments over the next decade. That is a staggering sum. For context, Ghana's total foreign direct investment inflows in recent years have averaged between $2 billion and $3 billion annually. Mobilising $20 billion for energy alone will require a massive effort.

The government has also made progress on the financial front. In his 2026 State of the Nation Address, President Mahama disclosed that negotiations with nine Independent Power Producers have yielded immediate savings of $250 million and the restructuring of approximately $1 billion in legacy debt over a 36-month payment period. That is real progress. The debt overhang from the previous era of take-or-pay contracts has been a crippling burden.

The government has also secured over $3.5 billion in upstream oil and gas investment commitments. Drilling activities have resumed. Crude oil production is expected to increase for the first time in almost six years. The Eban-Akoma field is expected to add 50,000 to 70,000 barrels per day, with first oil targeted as early as 2027. A $2 billion framework agreement will add 20 new wells in the Jubilee and TEN fields. And GNPC will commence drilling in the Voltain Basin in October 2026.

Now, let me give you the rest of the story. The part that keeps energy experts awake at night.

The Electricity Company of Ghana is in distress. President Mahama painted a stark picture in his address. Only about 52 percent of energy injected into the grid is effectively collected due to high commercial and technical losses. Of the revenue collected, approximately 62 percent was used to service obligations to power producers and related entities. That leaves little for maintenance, investment, or even basic operations. ECG's debts to IPPs stood at an estimated $1.73 billion in 2024. That is not a liquidity problem. That is a solvency problem.

This is why the government is cautious about signing new Power Purchase Agreements. Past mistakes are fresh. In the 2010s, Ghana signed take-or-pay contracts with IPPs, obligating the state to pay for unused capacity. The result was excess capacity, wasted spending, and a debt pile estimated at over $3 billion. The government has imposed a moratorium on new PPAs for renewables, only partially lifted in 2023. The Ministry of Energy is reportedly developing a new PPA model tailored to renewables, intended to attract investors without adding to public debt. But the caution is understandable. Once burned, twice shy.

The grid itself is fragile. Executive Director of the Africa Sustainable Energy Centre, Ing. Justice Ohene-Akoto, has warned that feeding solar into the grid can destabilise frequency, potentially collapsing the system. Ghana's grid cannot currently absorb large amounts of variable renewable energy without significant investment in battery storage, smart grid technologies, and demand response systems. The April 2026 Akosombo substation fire, which damaged critical control systems at one of the country's most important transmission hubs, exposed just how brittle the infrastructure is.

Institutional capacity is also a constraint. The Renewable Energy Directorate currently has only seven civil servants working to ensure the effective delivery of programmes and projects. Seven. For a country trying to mobilise $20 billion and transform its energy sector. The government plans to establish a Renewable Energy Authority to address this, but the authority has not yet been operationalised.

The dual-track strategy that Ghana is pursuing makes sense. Gas as a bridge fuel. Renewables as the destination. The 1,200 megawatt state-owned thermal power plant announced in the 2026 Budget is the centrepiece of the gas-to-power strategy. It will be fuelled by natural gas from offshore fields, reducing dependence on expensive imported light crude oil. The Ghana Gas Processing Plant is being fast-tracked to handle increased gas supply. Total OCTP and Jubilee partners are projected to produce 1,150 million standard cubic feet per day, enough to generate up to 1,200 megawatts, surpassing the capacity of the Akosombo Dam.

On the renewable side, there are real projects under construction. First Sky Energies completed a 50 megawatt solar PV plant in Yendi in March 2026, the largest fully Ghanaian-owned utility solar project. LMI Holdings is developing the 1,000 megawatt Norbert Anku Solar Park in the Dawa Industrial Enclave, with Phase 1 of 100 megawatts due by December 2026. Crucially, this project will supply power directly to industrial clients, bypassing the national grid entirely. That is a recognition of ECG's limitations.

The Scaling-Up Renewable Energy Programme, backed by the African Development Bank, is deploying 35 mini-grids serving 47 island and lakeside communities, 12,000 rooftop solar systems, and 645 public sector PV systems. A national net-metering framework is being prepared, which would allow households and businesses with rooftop solar to feed excess electricity into the national grid.

Let me also address the nuclear question. The Integrated Power Sector Master Plan includes a nuclear option under its most ambitious emissions-reduction scenario, with a 2,688 megawatt nuclear plant added in the mid-2030s. That is a long-term play. For now, gas and solar are the immediate priorities.

The government's execution momentum is real. The Yendi plant is operational. The Norbert Anku project is under construction. The SREP mini-grids are being deployed. Upstream investment has been secured. Debt has been restructured. The policy framework is in place.

But the binding constraints remain. ECG's financial distress is the most persistent barrier. Without reform, without loss reduction, without payment collection, the entire transition is at risk. The Renewable Energy Authority must be established and adequately staffed. Grid modernisation must accelerate. The PPA moratorium must be fully lifted, with a new model that protects both investors and the state.

The next three years will determine the outcome. If the authority is established, if ECG reform moves forward, if grid modernisation accelerates, and if the committed projects reach commercial operation on schedule, Ghana will meet or exceed its renewable targets. If these actions are delayed or politically stalled, the 10 percent target will join a long list of well-intentioned Ghanaian energy plans that never reached full implementation.

The transition is achievable. The technology exists. The capital is available. The policy framework is sound. But achievement requires action, not just policy documents. The clock is ticking. And the lights are watching.

.

Source Used: Accra Street Journal