Ghana could face fuel costs exceeding US$1 billion in 2025 to power its thermal plants, according to Energy Minister Hon. John Abdulai Jinapor. The warning comes amid increasing electricity demand and a rising reliance on imported liquid fuels such as diesel, light crude oil, and heavy fuel oil.
Speaking in Accra at the inauguration of the Steering and Technical Committees for the construction of Ghana’s second Gas Processing Plant (GPP2), the Minister described the country’s current fuel use as financially unsustainable. He noted that the gas supply deficit, estimated at 100 million standard cubic feet per day (MMscf/day), is pushing the government to procure costly fuel imports, which are not fully covered by electricity tariffs. This situation is deepening the sector’s financial strain and contributing to mounting debts owed to Independent Power Producers (IPPs).
To address the issue, the government is prioritizing the development of GPP2. The new facility is expected to expand domestic gas processing capacity and reduce the reliance on imported fuels. According to projections, GPP2 could save the country up to US$500 million annually, effectively paying for itself within two years of operation.
The Finance Minister, Dr. Cassiel Ato Forson, who chairs the GPP2 Steering Committee, criticized the lack of prior investment in gas infrastructure. He emphasized that Ghana has been overly dependent on the existing Atuabo Gas Processing Plant, a bottleneck that poses long-term risks to energy security and affordability. The Finance Minister called for swift action from the technical team to ensure GPP2 is delivered efficiently and without delay.
Beyond financial savings, the GPP2 project is expected to bring wider socio-economic benefits, including increased LNG and LPG availability, improved energy reliability, and the creation of both direct and indirect jobs in construction, operations, and support services.
However, concerns have been raised by the Africa Centre for Energy Policy (ACEP) regarding the project’s financing and procurement transparency. The think tank criticized the 2025 national budget for lacking clarity on GPP2’s funding structure and urged the government to ensure value-for-money in contracting. ACEP also pointed to the US$290 million lost to gas flaring in 2023, stressing the need for better planning and cost control in future infrastructure projects.
With energy demand surging and operational costs on the rise, the successful implementation of GPP2 is seen as a strategic inflection point for Ghana’s energy sector. The project aims to pave the way toward a more sustainable, gas-reliant, and cost-effective energy future.