Ghana’s government has signed agreements worth $3.5bn with operators of the Jubilee and Sankofa oil fields to reduce gas prices and boost domestic supply, in a move aimed at stabilising energy costs and strengthening the country’s power sector.
Energy and Green Transition Minister John Jinapor announced on 27 January that the deals—valued at $2bn with Jubilee partners and $1.5bn with Sankofa partners—have cabinet approval and are awaiting parliamentary ratification. The agreements will lower gas prices from $3.1 to $2.5 per unit, while increasing consumption and crude oil output.
The government says subsidising gas will cut electricity generation costs, reduce reliance on expensive imported liquid fuels, and ease the burden on households and industries. High energy costs have been a major driver of inflation and industrial inefficiency in Ghana.
Gas‑powered electricity is expected to rise to 78.8% of total generation, up from 70.8%, while hydropower output is projected to fall to 20.9% due to variable rainfall.
The subsidy comes as the Public Utilities Commission has raised electricity tariffs by 9.9% this year, citing exchange rate volatility that has increased costs for gas‑run thermal plants. The tariff review is part of IMF‑backed reforms to stabilise the sector and reduce subsidies, but low‑income households have complained that higher bills consume a large share of their budgets.
Earlier in January, Accra announced the clearance of $1.47bn in energy sector debt owed to international partners including Vitol and Eni, addressing years of unpaid gas supplies from the Offshore Cape Three Points (OCTP) field. The settlement was supported by the restoration of a $500m World Bank Partial Risk Guarantee.
Around $400m was also channelled to clear legacy debts owed to Independent Power Producers such as Karpowership Ghana, Cenpower, and Sunon Asogli, following renegotiated power purchase agreements. The government says it will remain current on IPP invoices through disciplined implementation of the Cash Waterfall Mechanism.