President John Dramani Mahama has announced plans for the government to sign an agreement before the end of 2026 to construct a 1,200-megawatt state-owned gas-fired thermal power plant.

The project is expected to significantly increase Ghana’s thermal power generation capacity and form part of the government’s broader strategy to secure reliable electricity while adapting the country’s energy mix to changing global trends.

President Mahama said the decision takes into account the growing global shift towards renewable energy and the increasing adoption of electric vehicles.

Addressing a town hall meeting with the Ghanaian community in New York, the President said government was being cautious about making long-term investments in power infrastructure that could eventually become stranded as countries transition towards cleaner sources of energy.

“We are going to build the biggest thermal capacity in Ghana. Before the end of this year, we’re going to sign 1,200 megawatts of gas thermal power,” President Mahama said.

He explained that gas-fired generation remained important to Ghana’s electricity needs, particularly as the country seeks to maintain reliable power supply while gradually responding to changes in the global energy landscape.

The announcement also comes against the backdrop of the government's efforts to address financial challenges in Ghana’s energy sector, including outstanding obligations to independent power producers (IPPs).

President Mahama said government had now cleared the accumulated energy-sector debts and had returned to a position where payments to IPPs were current.

“We brought IPPs, and everybody was threatening to switch off power. Today, I can tell you, we have paid off our energy debts. And we are current with the payments,” he said.

The President further disclosed that the Electricity Company of Ghana (ECG) had restructured its revenue collection arrangements to ensure that money collected from electricity consumers is channelled more effectively towards payments to power producers.

He said the measure was intended to improve the financial sustainability of the electricity supply chain and ensure that power generators receive timely payments, reducing the risk of disruptions to electricity generation.

The planned 1,200MW facility would therefore add substantial state-owned generation capacity to Ghana’s power system, while the government continues to pursue measures to strengthen the financial and operational stability of the energy sector.