ASEC'S TAKE ON THE 2026 MID-YEAR BUDGET REVIEW: GHANA MUST BALANCE ENERGY SECURITY WITH THE GREEN TRANSITION
The Africa Sustainable Energy Centre (ASEC) has reviewed the 2026 Mid-Year Budget Review presented by the Minister for Finance and welcomes Government's continued commitment to strengthening Ghana's energy sector. The budget contains several positive interventions that have the potential to improve energy security and support economic growth. However, ASEC believes that some of the proposals require greater stakeholder engagement and a more balanced approach that aligns with Ghana's long-term energy transition and climate objectives.
1. The Proposed 1,200 MW Thermal Power Plant: A Step in the Right Direction, But Balance Is Needed
ASEC welcomes Government's proposal to develop a 1,200 MW thermal power plant to increase Ghana's electricity generation capacity. As electricity demand continues to grow, additional generation capacity is essential to support industrialization, economic growth, and the reliability of the national grid.
However, while increasing generation capacity is necessary, Ghana must not lose sight of its climate commitments and long-term energy transition goals.
Ghana has set a target of achieving a 10% renewable energy share by 2030, yet renewable energy currently contributes only about 2% of the country's electricity generation mix. The addition of another 1,200 MW of thermal generation, without a corresponding expansion in renewable energy capacity, will further increase the share of thermal generation and make it even more difficult for Ghana to achieve its renewable energy target.
ASEC therefore calls on Government to complement this investment with accelerated deployment of utility-scale solar, wind energy, battery energy storage systems, and distributed renewable energy projects.
Energy security and the green transition should advance together—not compete with one another.
2. The Green Transition Must Be Reflected in the Budget
ASEC also observes that while the Ministry has been renamed the Ministry of Energy and Green Transition, the green transition component was not sufficiently reflected in the Mid-Year Budget Review.
The renaming of the Ministry was a commendable policy signal that demonstrated Government's commitment to sustainability. However, that commitment must now be translated into tangible investments and policy actions.
The budget places significant emphasis on expanding thermal generation, yet comparatively little attention is given to renewable energy deployment, battery storage, energy efficiency, green hydrogen, electric mobility, and other initiatives that are central to Ghana's green transition.
ASEC urges Government to ensure that future budgets allocate adequate resources towards renewable energy development and other low-carbon technologies. The Ministry's mandate should be reflected not only in its name but also in its priorities, programmes, and investments.
3. Retaining the GHS 1 Fuel Levy Is Disappointing
ASEC had anticipated that the Mid-Year Budget Review would announce the removal of the GHS 1 fuel levy.
While Government continues to pursue measures to stabilize the energy sector, retaining the levy places an additional financial burden on households and businesses already facing high living costs.
Removing the levy would reduce fuel prices at the pump, lower transportation costs, ease inflationary pressures, and ultimately reduce the cost of goods and services across the economy.
ASEC therefore encourages Government to provide greater transparency on how the proceeds of the levy have been utilized and to outline a clear roadmap for its eventual withdrawal.
4. LPG Expansion Is Positive, But Ghana Needs a Comprehensive Clean Cooking Strategy
ASEC welcomes Government's initiative to replace traditional cooking fuels with Liquefied Petroleum Gas (LPG) as part of efforts to improve household energy access.
LPG represents an important transitional fuel that can improve public health and reduce dependence on biomass. However, Ghana's long-term ambition should extend beyond LPG.
The country must accelerate investments in clean cooking solutions such as electric cooking, bioethanol, biogas, improved biomass cookstoves, and other modern cooking technologies that align with Ghana's climate commitments while improving health outcomes.
A comprehensive national clean cooking strategy is essential to achieving universal access to modern cooking energy.
5. Second Gas Processing Plant: Greater Stakeholder Engagement Is Essential
ASEC welcomes Government's commitment to constructing a second Gas Processing Plant (GPP Train 2), recognizing its importance in strengthening domestic gas processing capacity, improving energy security, and supporting industrialization.
However, ASEC notes that the project has shifted from an originally Government-owned model to a private sector-led arrangement.
While private sector participation can bring financing, technical expertise, and operational efficiencies, such a strategic policy shift should have been preceded by broader stakeholder engagement and public consultation.
ASEC further recommends that Government pays particular attention to the fiscal terms governing the project, including royalty arrangements, local content requirements, and long term value retention, to ensure that Ghana derives maximum economic benefit from its natural gas resources.
Strategic national assets should continue to deliver long-term value to the Ghanaian people.
Conclusion
ASEC commends Government for prioritizing investments aimed at improving Ghana's energy security. Nevertheless, Ghana's energy future must be built on four equally important pillars: energy security, affordability, sustainability, and resilience.
Future budget statements should demonstrate a stronger balance between expanding conventional energy infrastructure and accelerating Ghana's transition towards a cleaner, more sustainable energy future.
