Energy Sector

The energy sector in Ghana contributes significantly to the economy. The sector can be classified into two main sub-sectors as follows:

• Petroleum sub-sector
• Power sub-sector

Ghana’s petroleum sector involves upstream and downstream activities. The upstream activities include the production and refining of crude oil and the downstream activities include distribution and marketing of petroleum products and premixing of petroleum products for industrial uses, including fishing. Production from phase 1 development of the Jubilee field commenced on 28th November 2010 and was inaugurated on the 15th of December 2010. 

This milestone was achieved around 40 months after discovery of the field. Gross production of over 69,000 bopd has been achieved from five wells and full production capacity of 120,000 bopd is expected to be reached within the next five months as the remaining four wells are being completed and brought on line.

Ghana relies mostly on Tema Oil Refinery (TOR) for its petroleum product supplies. The products are retailed through gas stations which are either owned by the Oil Marketing Companies (OMCs) or private individuals. Distribution of petroleum products in Ghana is dominated by multinational oil marketing companies.

Following the deregulation policy of the government, the oil marketing companies have increased in numbers to include several local Ghanaian companies. There are over twenty oil marketing companies in Ghana. The private sector, including the OMCs and others source and supply finished products through an open competitive tendering system.

The power sub-sector involves the generation, transmission and distribution of electrical energy for industrial, commercial and domestic use in Ghana. The Power System of Ghana is run by three utility companies; the Volta River Authority (VRA), Ghana Grid Company Limited (GRIDCO) and Electricity Company of Ghana (ECG). 

The Volta River Authority has the primary function to supply electrical energy and therefore the Authority is responsible for the generation of electricity and GRIDCO is responsible for the transmission of electricity in Ghana. 

VRA supplies electricity in bulk to Electricity Company of Ghana and Northern Electricity Department for distribution to consumers. The total installed generating capacity of electric power in Ghana is about 1650 MW, comprising of 1100 MW of hydro generation (Akosombo and Kpong stations) and 550 MW from Takoradi Thermal Power Station.

Ghana is endowed with several renewable energy resources. These include solar radiation, small hydro, biomass and wind. Technologies to harness most of these resources have been demonstrated in Ghana. The government’s energy policy is embodied in the Strategic National Energy Plan 2006-2020. 

The policy aims to develop a sound energy market that would provide sufficient, viable and efficient energy services for Ghana’s economic development through the formulation of a comprehensive plan that will identify the optimal path for the development, utilization and efficient management of energy resources available to the country.

The energy sector has been a vital component of Ghana’s industrial and socioeconomic development. In this regard, the sector has been undergoing a number of developmental initiatives to improve overall operational efficiency and supply security.

Ghana has relied mainly on hydro-power plants for electricity generation. A few thermal plants are used to regulate the peak load. However, recently the net demand for electrical power has been considerably greater than the supply.

As part of the strategies to achieve the objectives in the National Energy Strategic Plan, the Government through the Ministry of Energy is encouraging public-private sector partnership by securing private sector investment in partnership with the public sector for re-capitalization of the energy supply system.

Investment opportunities therefore exist for the development of a viable local industry for the production of components and systems locally, to meet future spare-parts requirements of future investments thereby making savings and ensuring sustainability.

Investment opportunities in the sector include:
1. Energy service companies to provide energy services in these areas:
• Energy Audits & Energy Management Strategies
• Power Factor Correction
• Electrical Load Management
• Boiler Efficiency/Heat Recovery
• Monitoring and Targeting Energy Management
• Tariff Analysis
• Refrigeration and Air Conditioning Systems
• Compressed Air Systems
• Kilns and Furnaces
• Fuel Substitution

2. Energy Manufacturing Companies to supply energy-monitoring equipment to better meet the increased requests for power monitoring and tariff analysis from industry in the country.

3. Companies to provide an alternative decentralized sustainable energy system that can easily be deployed in remote and deprived communities into the overall national energy mix.

4. Companies to provide solar vaccine refrigerators for the preservation of vaccines for child immunization programmes in remote and off-grid parts of the country.

5. Provision of solar energy systems to schools in off-grid communities.

6. New, higher quality and cost competitive energy services to the poor, for cooking, transport, water heating and other home appliances.

• Penetration of rural electrification by decentralized renewable energy complementation
• Penetration of solar energy in hotels, restaurants and institutional kitchens using solar water heaters
• Increased LPG penetration
• Improved efficiency cook-stove penetration
• Penetration of biogas for cooking in hotels, restaurants and institutional kitchens
• Increase the penetration of modern energy into agriculture for increased agricultural production, to help achieve the nation’s food supply security objectives
• Substitution of diesel with bio-diesel in agricultural mechanization
• Drying of exportable farm produce such as pepper with solar dryers
• Displacing the use of diesel for irrigation with grid electricity and mechanical wind pumps
• Large-scale commercial poultry farmers
to meet at least 10 percent of their electricity needs from biogas, using the droppings from the birds.


Incentives to the sector may apply under the following provisions:
• There is custom duty exemption for agricultural and industrial plant, machinery and equipment imported for investment purposes
• Listed companies enjoy corporate tax of 25% and newly listed companies enjoy 25% corporate tax for the first three years
• Location Incentives (tax rebate) for manufacturing industries located in the regional capital