Government must not hand over planned Ghana Gas second Gas Processing Plant (GPP Train 2)

The debate over the ownership and management of Ghana’s strategic energy assets has reached a critical turning point. At the center of this discussion is the planned construction of the Ghana National Gas Company’s second Gas Processing Plant (GPP Train 2) in Atuabo. In recent times, policy leanings and whispers suggest a disposition by the state to hand over this critical infrastructure to a private entity.

However, the Africa Sustainable Energy Centre (ASEC), a leading energy sector think tank, has raised a fierce objection. Handing over GPP Train 2 to the private sector would not merely be a commercial transaction; it would be a severe, irreversible missed opportunity for the nation.

Evaluating this situation through a lens of economic logic, national security, and structural alignment reveals a clear conclusion: the state must maintain absolute ownership of GPP Train 2.

Navigating the Sovereign Burden of Power Purchase Agreements (PPAs)

To understand why a private GPP Train 2 defeats the fundamental structure of Ghana's energy sector, one must look at how our power market is legally and financially wired. Under the current Power Purchase Agreements (PPAs) signed with Independent Power Producers (IPPs), the Government of Ghana took on a massive, legally binding responsibility. In standard international practices, IPPs are typically mandated to procure their own fuel to run their thermal plants. They bear the supply risks, commercial risks, and procurement logistics.

Ghana, however, chose a centralized strategy. The state volunteered to act as the primary fuel supplier, absorbing the risk to guarantee cheap, steady gas for power generation.To fulfill this heavy sovereign obligation, the government set up the Ghana National Gas Company (Ghana Gas) as the exclusive national vehicle to harness, process, and distribute domestic gas. If the state now turns around and hands the critical expansion of this processing capacity (GPP Train 2) to a private firm, it completely breaks this operational chain.

Why should a private company profit from a supply chain where the state bears 100% of the financial and structural liability? A private operator will prioritize maximizing profit margins for its shareholders, creating an unnecessary middleman. This completely defeats the original purpose of the state-led fuel channel, artificially inflating power production costs and exposing the state to volatile commercial terms from a private monopolist.

Privatization is a Remedy for Failure, Not a Reward for Success

From an economic policy standpoint, privatization is fundamentally a remedial measure. It is a tool deployed by governments to rescue heavily mismanaged, unprofitable, and structurally broken public institutions that drain the national treasury.

Ghana Gas does not fit this description.

Since its inception, Ghana Gas has proven to be one of the most effective, highly functional, and commercially viable state-owned enterprises in the country. It has successfully managed the existing Atuabo plant, consistently substituted expensive imported light crude oil with indigenous natural gas, and saved the nation billions of dollars. Privatizing GPP Train 2 is an attempt to fix what is not broken. It defies basic economic sense to hand over a highly lucrative, strategically vital, and smoothly operating sector to private hands when indigenous state engineers and managers have already demonstrated top-tier technical and financial competence. If the government is eager to introduce private sector efficiency into the energy landscape, it must look at areas that genuinely need urgent structural rescue. ASEC has consistently pointed out that the commercial aspect of the Electricity Company of Ghana (ECG) is where privatization is desperately required.

As ASEC has repeatedly clarified, advocating for the privatization of ECG's commercial operations does not stem from the idea that private enterprise is better. Rather, it is a pragmatic response to ECG's chronic, multi-billion-cedi financial losses, which threaten to collapse the entire energy sector. The government must focus its reformative energy there. It should fix the leaking bucket (ECG) through private participation, rather than giving away the golden goose (Ghana Gas).

Beyond the balance sheets and legal clauses lies the unyielding reality of national security. Natural gas is no longer just an economic commodity; it is the absolute backbone of Ghana’s industrialization drive and domestic electricity grid. In times of national economic distress or currency fluctuations, a private entity can easily halt operations, demand immediate tariff adjustments, or prioritize external commercial interests over national survival. By retaining 100% ownership of GPP Train 2, Ghana ensures that gas processing remains aligned with national development timelines and affordable tariff structures.