Energy & Renewable Energy

Sector overview

Ghana's energy sector has been a vital component of the country's industrial and socio-economic development. Power production grew at 9.7% annually from 2017 to 2020, with a projected 8.67% average for 2023-2025.

Thermal generation accounts for the majority of Ghana's power, complemented by significant hydro contribution. Ghana has also been a net exporter of electricity for three years in a row.

Investment opportunities

Investment opportunities include energy service companies (power factor corrections, electrical load management, tariff analysis), equipment manufacturing for power monitoring, and decentralized sustainable energy systems for remote and deprived communities, including solar vaccine refrigerators for child immunization.

Renewable Energy Master Plan (REMP)

To steer the development of the renewable energy sector, the Renewable Energy Master Plan (REMP) provides an investment-focused framework. Its 2030 targets are ambitious and quantified.

Solar and biomass

Solar PV is the most successful renewable in Ghana so far, with small-scale rooftop and lantern applications, grid-connected systems, and solar water heating in the hospitality industry. Biomass-based industries have installed combustion technologies for heat and power generation. Biogas installations also exist with varying levels of success.

Investment incentives

Investors benefit from feed-in-tariff (FIT) rates guaranteed for ten years, reviewed every two years. Custom duties exemptions apply to plant, machinery, equipment, and parts. Ghana is a signatory to the World Bank's Multilateral Investment Guarantee Agency (MIGA) Convention.

Caveat : the FIT scheme on solar PV has created friction with the Electricity Company of Ghana (ECG), which argues it loses money buying power at preferential tariffs, while the import tax exemption only covers solar panels (other components taxed up to 20%).

Regional context

In West Africa, Ghana has the highest percentage of electrification with a large share of fossil-fuel electricity in its energy mix. This means the potential for green energy development is strong, while noting that Senegal, Côte d'Ivoire and Nigeria have more favorable PV cost / electrification ratios in terms of return on investment for solar PV projects.

The development of new solar PV electrification projects will depend on the government's willingness to grant grid access to new players (via ECG), and to review its investment support policy regarding import tax exemptions to increase Ghana's competitiveness with regional competitors.