GHANA ENERGY

TRANSITION AND
INVESTMENT PLAN
 GHANA ENERGY TRANSITION & INVESTMENT PLAN

Foreword
The specter of climate change looms large, I deeply thank the many stakeholders for their
presenting a challenge that transcends invaluable contributions and unwavering support,
borders and generations. Every corner of our including government Ministries, Departments
planet, including the very lands and waters and Agencies, regional governments, the
that cradle Ghana, is at risk. Rising sea levels, academic community, development allies, non-
shifting weather patterns, increasingly erratic governmental organizations, and the private
climatic phenomena and global geo-political sector.
uncertainties have made their presence felt,
signaling the need for swift and decisive action. My heartfelt appreciation goes out to every
government agency and partner, with a special
Ghana stands resolute in joining the international mention of Sustainable Energy for All (SEforALL)
community in combating this existential for their invaluable contributions.
threat. Our motivation is twofold: It is both
our ethical responsibility to safeguard our The journey ahead is both daunting and
planet and a unique prospect to redefine our promising. Yet, if we stand united, each step
we take will be a stride towards a future where
nation’s trajectory towards sustainable growth
our energy powers our nation and safeguards
and prosperity. We can chart a course that
it. Let’s come together, embrace the promise of
intertwines economic growth with environmental
tomorrow, and illuminate a prosperous, green,
stewardship by harnessing the vast potential of
and just pathway.
renewable energy sources.

I am immensely proud to unveil the Ghana

NANA ADDO DANKWA
Energy Transition and Investment Plan that was AKUFO-ADDO
built on Ghana’s Energy Transition Framework.
His Excellency the President of Ghana
This pioneering blueprint maps out our nation’s
journey to achieve net-zero emissions by
2060 based on the latest data and evidence,
ensuring that as our economy thrives, it does
so in harmony with the environment. This plan
is a testament to our dedication to fostering
green industries, nurturing the evolution of
cutting-edge low-carbon technologies, and
propelling our nation towards a sustainable
industrial revolution while giving equal growth
opportunities to men and women.

Our vision projects that by pursuing

this transformative path, we will unlock
approximately USD 550 billion in investment
opportunities by 2060. This is not just a domestic
undertaking; the Ghana Energy Transition and
Investment Plan is also a beacon for international
collaborations, beckoning global stakeholders
to share a vision of prosperity and sustainability.
 GHANA ENERGY TRANSITION & INVESTMENT PLAN

Acknowledgement
The Ghana Energy Transition and Investment Plan emerges from Ghana’s
unwavering dedication to fighting the battle against climate change. Born
out of robust collaboration, ingenuity, and a unified vision from pivotal
players in both the public and private sectors, this plan paves the way for
the energy sector to play a pivotal role in achieving Ghana’s climate goal of
net-zero emissions by 2060. Moreover, it aligns seamlessly with initiatives
by various government bodies to expedite its rollout.

The Energy Transition and Investment Plan offers a consolidated strategy for
the energy sector, encapsulating an all-encompassing approach that outlines
the financial layout necessary for its fruition. It maps out the immediate
journey and lays the groundwork for formulating energy-specific objectives
to be integrated into upcoming policy and regulatory frameworks.

Core decarbonization technologies are pinpointed within this plan to facilitate

a seamless transition. These technologies encompass renewable energy,
energy efficiency, hydrogen, e-mobility, energy storage, and sustainable
cooking solutions. Furthermore, the plan is geared towards project
identification that can trigger funding from state-driven and private avenues.

The Ministry of Environment, Science, Technology & Innovation extends its

heartfelt gratitude to Ministry of Energy and many stakeholders for their
invaluable contributions and unwavering support. This includes government
Ministries, Departments and Agencies, regional governments, the academic
community, development allies, non-governmental organizations, and the
private sector. Special thanks to Sustainable Energy for All (SEforALL) for
their tireless and invaluable input in developing this plan.

We now turn our focus towards the plan’s implementation, which will
require broad engagement with local and international stakeholders alike.
We look forward to working together towards realizing our vision for a
sustainable and prosperous future for our beloved nation.

HON. DR KWAKU AFRIYIE (MP)

Minister for Environment, Science, Technology & Innovation
Context & Objectives

Objectives of the Ghana Energy Transition and Investment Plan​

SEforALL is working with the Government The plan will be presented at the Global
of Ghana to build an Energy Transition and Africa Business Initiative on the 21st of
Investment Plan (ETIP)​ September and at subsequent events to
engage the global investment and climate
The plan will help Ghana frame an energy finance community​
transition agenda that will attract investment
while at the same time ensuring a just
transition and fully supporting Ghana’s rapid
economic growth trajectory​

Ghana’s Energy Transition and Investment Imperative

Internationally, the policy, business and • Secure investment. A slower transition will
investor communities are embracing reduce investor appetite as fossil assets
net zero emissions. are increasingly difficult to finance. A net-
zero target will position Ghana to secure
Ghana is at a turning point and has investment capital and donor support,
the opportunity to increase its climate which is now primarily directed at low-
ambition, avoid the economic risks of carbon assets.
a slower energy transition and secure • New growth sectors. A slower transition
its benefits​ presents a poor outlook for energy exports
as international oil and demand fall. A
Ghana also has immense green growth net-zero target will create new economic
opportunities that include carbon opportunities for Ghana in global energy
markets, green hydrogen, green and technology markets.​.
manufacturing and localization of • Energy independence. A carefully
low-carbon technologies ​ managed transition will reduce Ghana’s
energy independence as domestic
demand grows and imports increase.
 GHANA ENERGY TRANSITION & INVESTMENT PLAN

Table of
Contents
1 Executive Summary 1

2 Sector Insights 9

3 Socioeconomic Impacts and Financing Needs​ 25

 GHANA ENERGY TRANSITION & INVESTMENT PLAN

CHAPTER ONE

Executive Summary

Ghana’s path to Net Zero – Key Messages

GHANA’S EMISSIONS BASELINE AND FUTURE PATHWAYS

Without further action, Ghana’s emissions could rise from 28 Mt CO2e in 2021 to over 140
Mt in 2050. Under Business As Usual (BAU), the bulk of emissions growth will come from
1
transport, driven by population growth, GDP per capita growth, and vehicle ownership.

Alternative Net Zero pathways consider five country-level objectives or guiding principles:
environmental sustainability, energy system costs, economic impact, social implications,
2
and security of supply.

AN ORDERLY TRANSITION TO NET ZERO

Ghana could achieve Net Zero CO2 emissions by 2060, through the deployment of low-
carbon solutions across all sectors. A 2060 target could achieve an orderly transition,
3
balancing public-policy objectives.

Four main decarbonization technologies will anchor an Orderly Transition. Together,

renewables, low-carbon hydrogen, battery electric vehicles and clean cookstoves cover
4
over 90% of 2060 abatement.

SOCIOECONOMIC IMPACTS AND FINANCING NEEDS

In a Net Zero scenario, Ghana would need around USD 550 bn in capital investment to
2060 (USD 140 bn more than under BAU), with the majority of investment going to the
5
power and transport sectors. Delivering this investment could drive new economic activity
in the energy sector and beyond, potentially supporting an additional 400 thousand net
new jobs by 2060.

Capital markets could provide the largest funding pool, but tapping these sources will
6
require de-risking interventions.

THE PATH FORWARD

There is a set of clear next steps to drive the implementation of a pathway, underpinned
7
by strong governance, a clear timeline and cadence of interaction, and supportive policies.

1
EXECUTIVE SUMMARY GHANA ENERGY TRANSITION & INVESTMENT PLAN

Economic growth will drive significant energy emissions growth,

even under current policies

PROJECTED UNDERLYING GROWTH

Population and income projected to grow

substantially to 2060:
• Population expected to grow 1.7x, at 1.5%
CAGR1
• GDP per capita expected to grow 4.4x, at 4%
CAGR1

PROJECTED CO2 EMISSIONS GROWTH, MtCO2 Only energy CO2 emissions included

BAU CURRENT POLICIES

Demand growth drives 5x growth in CO2 Low-carbon technologies limit emissions

emissions to 2060 growth to 2x by 2060
• Road transport: car travel grows 18x • Emissions reduced by ~70% renewables in
power mix2, and 100% EV car sales by 2060.
• Residential electricity grows 3X
• Remaining emissions driven by rise of gas in
• Substantial expansion of manufacturing base
the power; continued use of diesel trucks in
transport and limited industry decarbonization.
1
Compound Annual Growth Rate
2
45 GW generation capacity from RES (Nuclear, Geothermal, Hydro power, Solar PV, Offshore wind, Onshore wind) out of 65 GW total
capacity in 206
Source: GDP - IIASA SSP database, Population - World Bank, SEforALL analysis

2
EXECUTIVE SUMMARY GHANA ENERGY TRANSITION & INVESTMENT PLAN

Ghana’s pathway design is dependent

upon the weight attributed to
different objectives
GUIDING PRINCIPLES

A. Investment B. New growth sectors

Create conditions for investment into Ghana’s Optimize for macroeconomic benefit, supporting
energy system by pursing an energy mix that economic activity in the energy sector and wider
is aligned with international investor appetite. economy.

C. Energy security and trade balance D. Employment impact

Ensure system security through self-sufficiency, Solve for job retention and future job creation
system stability, and low-risk access to supplies, potential from decarbonizing Ghana’s economy.
e.g., free-up a greater share of Ghana’s oil and gas
consumption for export under Net Zero vs BAU.

E. Environmental sustainability F. Affordability

Reduce carbon emissions to reach Net Zero and Minimize energy costs to the Ghanaian population
minimize the overall carbon budget for Ghana and energy-dependent domestic sectors.
to align with international investor expectations.

3
EXECUTIVE SUMMARY GHANA ENERGY TRANSITION & INVESTMENT PLAN

Achieving Net Zero Emissions

by 2060 will require emissions
to peak around mid 2030s and
begin a rapid decline thereafter
CO2 EMISSIONS BY SECTOR, MtCO2e 2020-2060

Source: SEforALL analysis

KEY OUTCOMES

• Both industry and transport sector emissions • By 2060 emissions are close to zero in all
peak between 2035 and 2040 sectors, with negative emissions in power
offsetting a small volume of residual emissions
• Power CO2 emissions fluctuate, as demand
in the industry
growth offsets the declining CO2 intensity of
the grid

Source: SEforALL analysis

4
EXECUTIVE SUMMARY GHANA ENERGY TRANSITION & INVESTMENT PLAN

Six main decarbonization technologies

will anchor an Orderly Transition
pathway, with transport electrification
driving around 40% of abatement

TECHNOLOGY

ELECTRIFICATION CARBON CAPTURE LOW-CARBON BATTERY ELECTRIC CLEAN COOKING NEGATIVE-EMISSION

& RENEWABLES & STORAGE HYDROGEN TECHNOLOGIES TECHNOLOGIES1 SOLUTIONS

CONTRIBUTION

Replace fossil Decarbonize Substitute fossil Replace internal Replace traditional Implement
fuels through industrial and/or fuels as a heat source combustion engines biomass and oil- technology-driven
electrification; power high temperature and/or feedstock with electric derivatives (e.g., solutions such as
provided by solar, heating processes with green and batteries, primarily LPG and kerosene) BECCS2
wind, geothermal and by capturing energy blue hydrogen and for passenger cars, with improved
potentially nuclear and process-related hydrogen derivatives 2/3 wheelers and biomass and electric
energy in combination CO2 streams (e.g., in (e.g., ammonia, light trucks cookstoves in
with energy storage steel BFBO, cement synfuels) in Industry buildings
or chemicals) and Transport

CONTRIBUTION TO CO2 ABATEMENT UNDER NET ZERO VS BAU IN 2060

40%
26% 5% 2%
12% 16%

1
Abatement for clean cooking accounts for estimated associated deforestation emissions
2
Bioenergy with carbon capture and storage. Although nature-based solutions also deliver negative emissions, using nature-based solutions
to offset energy sector emissions would reduce the scope to monetise these solutions in international carbon markets
Source: SEforALL analysis

5
EXECUTIVE SUMMARY GHANA ENERGY TRANSITION & INVESTMENT PLAN

Net Zero 2060 will convey

benefits across a full range of
public policy objectives

INVESTMENT NEW GROWTH SECTORS

USD 24 Bn USD 650 Bn

Near-term investment opportunities in clean energy Global market for clean technologies by 2030, with
infrastructure, with $500 billion of overall investment opportunity to create new domestic industries in
opportunities to 2060 solar PV, electric vehicles, lithium-ion batteries and
clean cookstoves

ENERGY SECURITY & TRADE BALANCE EMPLOYMENT IMPACT

~90% 400,000
Reduction in domestic oil and gas consumption in Net additional jobs, of which 80% is directly
2060 Net Zero vs BAU, releasing these commodities stimulated by Net Zero investments in solar PV,
for export and EV charging / hydrogen fuelling stations

ENVIRONMENTAL SUSTAINABILITY AFFORDABILITY

2 GtCO2 <0.2% of GDP

Emissions avoided under Net Zero path vs BAU As average additional spending 1 required to
over the next 40 years decarbonize the economy to 2060 Net Zero vs BAU
(total incremental system cost to 2060 is USD 24 bn)

1 GtCO2
Total carbon budget of the Net Zero pathway over
the next 40 years

1
Includes CAPEX, O&M costs and fuel costs
Source: SEforALL analysis

6
EXECUTIVE SUMMARY GHANA ENERGY TRANSITION & INVESTMENT PLAN

A set of technology transitions will be needed to achieve Net Zero

SECTOR 2020 2030 2040 2050 2060

O&G Upstream Flaring and venting are reduced by

around 80% by 2030 through cost Reach complete flaring phase-out by 2060 through solutions that require policy support
competitive solutions1

Refining Application of CCS in the refining sector

Industry Steel Decarbonize future steel production through hydrogen DRI starting 2040 to reach
Improve energy and materials efficiency
80% of production mix by 2060

Cement Decarbonize future cement production starting 2040 through gas with CCS to
Improve energy and materials efficiency dominate by 2060

Chemicals and Improve the efficiency of industrial processes Decarbonize low- and medium-temperature heat through industrial heat pumps
other industries starting 2040

Decarbonize high temperature heat through gas CCS starting 2040

Transport Cars and Improve new cars efficiency standards Shift the market of new cars and 2/3
Shift the whole fleet to electric as old cars and motorcycles retire
motorcycles and encourage public transport usage wheelers to electric with ~30% CAGR

Freight trucks
Improve new efficiency standards on freight trucks and buses Shift trucks and buses to electric and hydrogen
and buses
Aviation and Introduction of
Implement new efficiency improvements
shipping biofuels in 2055

Buildings Cooking Replace traditional biomass cookstoves

Roll-out greater volumes of electric and improved biomass cookstoves to fully
by oil-derived and improved biomass
replace oil-derived ones by 2050
ones by 2030

Power and Power Deployment of solar PV starting 2020 to reach 26 GW by 2040 Fast deployment of solar PV starting 2040 at 5GW/yr in average to reach 146 GW by 2060
hydrogen
Deployment of nuclear units starting 2045 to each 3 GW by 2060

Hydrogen Production of green and blue hydrogen starting 2045 to reach

85% and 15% respectively from over 90 PJ production by 2060

1
Through re-use, Vapor Recovery Unit (VRU) or Leak detection and repair for fugitives (LDAR)

7
EXECUTIVE SUMMARY GHANA ENERGY TRANSITION & INVESTMENT PLAN

Net zero requires around USD 24bn in

cumulative additional spending over BAU
between 2020 and 2060
CHANGE IN CUMULATIVE SPENDING NZE VS BAU CHANGE IN CUMULATIVE SPENDING NZE VS BAU
2020-2060, USD bn 2020-2060, sectorial view, USD bn

KEY INSIGHTS

• Total capex and O&M are around USD 140 • The majority of the fall in fuel costs occurs in
bn and USD 65 bn higher than under BAU, the transport and power sectors. In the power
respectively; while fuel costs are around USD sector spending is around USD 45 bn higher
180 bn lower than under BAU; while in the transport sector
the fuel cost savings outweigh the increased
• The majority of the additional capex spending
capex, with spending in this sector around USD
occurs in the power and transport sectors, with
65 bn less than under BAU
some additional capex spending in the industry
and buildings sectors

1
Electricity and hydrogen are not allocated to end-uses
Source: SEforALL analysis

8
 GHANA ENERGY TRANSITION & INVESTMENT PLAN

CHAPTER TWO

Sector Insights
Oil & Gas

Reducing oil and gas flaring offers the greatest emissions reduction potential

OIL PRODUCTION UPSTREAM CO2 EMISSIONS DRIVERS OF REDUCTION IN

kbbl/day kbbl/day UPSTREAM EMISSIONS %

KEY MESSAGES

Oil production is expected to decline over the Reducing flaring is the primary lever to
period to 2060 as the energy transition dampens reducing oil and gas emissions:
global oil demand • Flaring and venting: Cost positive abatement

options include improving flaring efficiency and

Flaring accounts for 97% of oil and gas
emissions, and around 25% of total CO2 exporting gas through pipeline; repurposing
emissions: gas can deliver additional abatement, though
carries a cost premium
• Flaring and venting are reduced by around

80% to 2030, and to zero by 2060

Note: Oil production assumed to change in line with global oil demand in the IEA Announced Policies Scenario
Source: SEforALL analysis

9
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

CCS is the main solution to decarbonise refining operations

OIL REFINING TECHNOLOGY MIX ktoe

KEY OUTCOMES
• Refining activity falls by around half over • From the mid-2030s new oil refinery plant
the period to 2060 as domestic oil demand fueled by gas with carbon capture are delivered
decreases to reduce emissions from oil refining processes
• Oil remains the key fuel for oil refining processes • By 2060 all refinery processes use CCS to
for the next two decades minimise CO2 emissions

UNDERLYING DRIVERS OF THE PATHWAY

• Due to the cost premium of carbon capture and storage, this technology only emerges in the mid-
2030s to achieve the Net Zero target

ALTERNATIVE SOLUTIONS
• Depending on the rate of innovation, hydrogen it is likely that sustainable biomass will be in
could also provide a cost-effective solution for limited supply, and will be prioritized by sectors
decarbonising refining operations such as aviation and shipping with fewer viable
alternatives
• While biomass could also play a role in
decarbonizing low- and high-temperature heat,

Source: SEforALL analysis

10
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Industry

Low-emissions technologies and

clean fuel sources will allow Ghana to
decarbonize a rising industrial production
INDUSTRY
Electricity FUEL CONSUMPTION
Biomass CCS 2 Gas CCSPJ
2 Oil INDUSTRY CO2 EMISSIONS MtCO2
Hydrogen Biomass Gas
Totals represent net CO2 emissions

502

387
a.
p.
%
+5
300

236
186
146
112
83
59

2020 25 30 35 40 45 50 55 2060

Electricity Biomass CCS 2 Gas CCS 2 Oil

Hydrogen Biomass Gas

502

KEY OUTCOMES
• Decarbonisation of industry drives a shift
387in the fuel mix, with strong roles for electricity, hydrogen,
gas with CCS, and a smaller role for biomass

300

236
186
146
112
1
Includes equipment and machinery manufacturing, food and tobacco, paper and wood products, textile and industry not elsewhere specified
83
2
59capture and storage;
Carbon
3
Direct reduced iron technology
Source: SEforALL analysis

2020 25 30 35 40 45 50 55 2060

11
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

UNDERLYING DRIVERS OF THE PATHWAY

• Heat pumps replace fossil heating at low • CCS emerges as the least-cost solution to
temperatures, driving up the use of electricity decarbonise the cement sector as well as other
though with high efficiency. Heat pumps high temperature heating in chemicals and
account for around half of electricity demand, other industries
while the other half is to power appliances in • A small amount of biomass CCS is used to offset
industrial facilities.
residual emissions (chiefly from fossil CCS)
• Hydrogen demand is driven by its use in
the steel sector, which uses H2-based direct
reduced iron

ALTERNATIVE SOLUTIONS
• There is high confidence that electrification • Hydrogen or innovative electric technologies
will be key decarbonisation solution for low such as electric cement kilns are alternative
temperature heat processes solutions to decarbonise high temperature heat

12
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Transport

Electrification, hydrogen fuel cell vehicles

and biofuels replace oil-based transport
to decarbonise the sector

TRANSPORT 1 FUEL DEMAND – NZE PJ

p.a.
+3%

KEY OUTCOMES
• Economic growth drives 3-4x increase in • Biofuels replace oil-derived fuels in aviation
transport sector energy demand, with growth and shipping
in all modes • Overall fuel demand levels out from around
• Roll out of hydrogen-powered heavy trucks in 2040 as the increased efficiency of electric and
heavy trucks drives a shift to hydrogen as a fuel hydrogen vehicles offsets the effect of rising
demand for travel

1
The scope considers domestic aviation and shipping and road transport
Source: SEforALL analysis

13
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Electric cars dominate the fleet by the mid-2050s even under

current policies and fully replace fossil vehicles by 2060

CAR PARC TECHNOLOGY MIX Thousand vehicles

13,449
.a.
+8% p 10,407
7,923
5,923
4,324
2,098 3,069
740 1,332

2020 25 30 35 40 45 50 55 2060

CAR SALES TECHNOLOGY MIX Thousand vehicles

.a.
+6% p

Electric Liquid Fuel

KEY OUTCOMES
• Passenger car ownership grows 18x 2020-60 • By the mid-2030s, annual EV sales increase
as incomes rise sharply, doubling between 2045 and 2060 to
reach >1 mn per year
• Initially the vast majority of cars are ICE due to
the current EV cost premium and low volumes • By 2050 electric vehicles dominate the fleet
of EVs in the used vehicle market and fully replace fossil vehicles by 2060
• By the mid-2030s, used EVs are cost-
competitive and are available in the market

Source: SEforALL analysis

14
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

UNDERLYING DRIVERS OF THE PATHWAY

• Battery cost reductions drive a shift to electric • A shift away from used vehicles in the auto
vehicles in the international auto market market would be needed to accelerate the EV
transition
• In Ghana, second hand electric vehicles are
cost-competitive with internal combustion
vehicles by 2030, though market availability
is limited

A mix of battery electric and hydrogen fuel cell trucks

decarbonize the road freight sector

TRUCK PARC TECHNOLOGY MIX - NZE Thousand vehicles

.
%
p.a
+5

KEY OUTCOMES
• Truck fleet grows around 6x to 2060 as rising for low-carbon trucks remains small and the
incomes and population drive a greater volume vehicles carry a significant cost premium
of freight • Deployment of electric and hydrogen trucks
• Conventional liquid fuel trucks dominate for begins in the 2040s, and dominate the fleet
the next two decades as the global market by 2060

Source: SEforALL analysis

15
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

UNDERLYING DRIVERS OF THE PATHWAY

• Low-carbon trucks continue to carry a significant • Hydrogen is the preferred solution for long-
cost premium and strong policy support will be distance trucking due to greater range, while
needed to deliver them at the scale needed battery trucks are preferred for shorter distances
due to their greater efficiency

ALTERNATIVE SOLUTIONS
• There is high confidence in wide transition to • The specific mix of battery vs hydrogen vehicles
EV and H2-fuel cells for long-distance trucks will depend on improvements in battery cost
and vehicle range

16
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Emissions could peak in 2035 before falling back, with cars driving
the largest growth and largest reduction in carbon emissions

CO2 EMISSIONS PER TRANSPORT MODE – NZE MtCO2

KEY OUTCOMES
• Transport CO2 emissions peak around 2035 • Trucks also an important contributor to CO2
before falling back as all modes decarbonise emissions, though smaller due to their lower
distance travelled and fuel consumption
• Emissions from passenger cars account for the
majority of CO2 emissions in all years

UNDERLYING DRIVERS OF THE PATHWAY

• Electrification of cars, and 2/3 wheelers, buses • Hydrogen in heavy trucks and sustainable fuels
and light trucks drives the largest share of CO2 in aviation and shipping drive the remainder,
reduction achieving Net Zero transport by 2060

Source: SEforALL analysis

17
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Cooking and other energy use in buildings

A shift from LPG to clean fuels for cooking and water heating
drives buildings decarbonisation

BUILDINGS FUEL CONSUMPTION PJ BUILDINGS CO2 EMISSIONS MtCO2

KEY OUTCOMES
• Rising demand is met with cleaner energy, – CO2 emissions start to decrease from 2040
leading to emissions reduction from 2040 as over 60% of the building sector becomes
– Electricity use reaches 90% of the energy mix electrified
by 2060, while biomass decreases to 10% – Oil-derived cooking fuel is primarily LPG

UNDERLYING DRIVERS OF THE PATHWAY

• Ghana’s building electricity demand growth • Emissions from electricity and biomass are not
aligns with countries of similar income levels accounted for in the buildings sector:
• Population with electricity access will grow from – Biomass emissions are included in the
85% in 2020 to 100% in 2030 LULUCF sector
– Electricity emissions are included in the
power sector

Source: SEforALL analysis

18
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Cooking is primarily decarbonized through a shift from traditional

biomass and LPG to improved biomass and electric cooking

COOKING TECHNOLOGY MIX Million units

KEY OUTCOMES
• Traditional biomass remains the dominant • From the 2030s, electric cooking emerges as a
cooking fuel today, with LPG and improved key low-carbon solution in urban households
biomass playing a smaller role • By 2060 electric dominates in urban house-
• Traditional biomass is phased out by 2030 in holds, and improved biomass in rural house-
line with SDG7. The phase out is supported holds, phasing out LPG
by a growing role for both LPG and improved
biomass cookstoves

UNDERLYING DRIVERS OF THE PATHWAY

• Policy incentives to reduce the energy cost premium of LPG, sustainable biomass and electric cooking
solutions vs traditional biomass

ALTERNATIVE SOLUTIONS
• Overall it is highly likely that improved biomass • Consumer preferences may drive a different
and electric cook stoves will play a key role in balance of these two technologies
decarbonising the sector

Source: SEforALL analysis

19
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Power

Power demand grows around 15x to 2060,

driven by increasing population and GDP/capita

ELECTRICITY DEMAND BY SECTOR – NZE TWh

a.
p.
%
+7

KEY OUTCOMES
• Demand for power in Ghana grows at 7% p.a. • Transport emerges as a significant source
to 2060 of demand from around 2040, and by 2060
accounts for almost 30% of total demand
• The buildings and industry sectors, which today
account for almost all electricity demand, grow • Production of green hydrogen production also
strongly to 2060 emerges, accounting for 12% of demand by 2060

UNDERLYING DRIVERS OF THE PATHWAY

• Income growth drives substantial power • Growth in transport and hydrogen sectors
demand growth, primarily in the buildings and is driven by the Net Zero target, and the
industry sectors associated electrification of transport and the
shift to hydrogen in the transport and industry
sectors

Source: SEforALL analysis

20
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Solar PV meets the majority of growth in power

demand and drive decarbonization of the sector

POWER GENERATION MIX – NZE TWh

.
%
p.a
+7

x% Share of low carbon technologies1

KEY OUTCOMES
• Power demand grows 15x to 2060 due to robust • Rest of growth is met with nuclear and hydro, as
underlying growth, and electrification of end-use far as available resource allows
demands • By 2060, unabated fossil is phased out, with
• New solar PV meets the majority of this increase storage playing the key balancing role

UNDERLYING DRIVERS OF THE PATHWAY

• By the mid-2020s solar PV emerges as is the lead times due to consenting, planning and
most cost-competitive power generation construction timelines
technology. However, deep decarbonisation • Hydro can also provide cost-effective flexible
through solar PV will require storage, increasing
power, but its maximum resource is estimated
costs and requiring public support
at 2.5 GW
• Nuclear can provide cost-effective baseload
low-carbon power, but will require significant

1
Includes solar, wind, geothermal, hydro, biomass, nuclear and CCS technologies
Source: SEforALL analysis

21
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

ALTERNATIVE SOLUTIONS
• Solar PV is highly likely to play a key role in • Significant storage is needed to firm the output
the generation mix, while wind may play a from wind and solar. Alternative sources of firm
complementary role. The precise mix of wind power could include a greater role for nuclear,
and solar will depend on their cost reduction gas CCS, or hydrogen generators
pathway

The growth in generation requires a substantial growth

in new capacity, dominated by solar and wind

POWER GENERATION MIX – NZE GW

.
%
p.a
+9

x% Share of low carbon technologies1

1
Includes solar, wind, geothermal, hydro, biomass, nuclear and CCS technologies
Source: SEforALL analysis

22
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

KEY OUTCOMES
• Total capacity grows in line with demand • This pathway requires new capacity additions of
<1 GW in the 2020s, rising to around 3 GW per
• Solar PV accounts for the majority of capacity
year in the 2035s and 6-12 GW per year in the
with over 150 GW in 2060
2040s and 50s
• Gas capacity also rises to around 25 GW by
• The fast build out of solar capacities would require
2060. By 2060 gas is primarily used for security
significant technical, financial and policy support,
of supply
to simplify and accelerate projects development
• Other technologies (gas CCS, nuclear, hydro-
power, and hydrogen) contribute only a small
share of total capacity

UNDERLYING DRIVERS OF THE PATHWAY

• Unabated gas is the cheapest form of reserve capacity and operates at only 2% capacity factor by 2060

Source: SEforALL analysis

23
SECTOR INSIGHTS GHANA ENERGY TRANSITION & INVESTMENT PLAN

24
 GHANA ENERGY TRANSITION & INVESTMENT PLAN

CHAPTER THREE

Socioeconomic impacts
and financing needs

Around USD 550 bn cumulative capital investment is needed, with

power and transport accounting for around 90% of this total

TOTAL ANNUAL CAPITAL INVESTMENT REQUIRED BY SECTOR1, NZE

USD bn

Cumulative total, USD bn Sector shares

(2025-60)

.
p.a
+6%

KEY OUTCOMES
• Overall investment in energy technologies grows transport is driven by the costs of private cars
around 5x between 2025 and 2060, driven by and other vehicles, with ownership growing
income and population growth as well as a shift to significantly as incomes grow
more capital-intensive low-carbon technologies • Power and hydrogen accounts for a significant
• Throughout the period, transport accounts for share at around 20% of investment
the largest share of investment, at around 70%. • Industry and buildings account for a smaller share
The very high share of capital investment in
of investment, at under 10% of total

1
This chart shows investment at 5-year intervals ; values do not sum to cumulative investment.
Source: SEforALL analysis

25
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Around USD 140 bn capital investment is

additional to investment needs in a BAU scenario

CHANGE IN CUMULATIVE INVESTMENT NZE VS BAU BY SECTOR, 2020-60 USD bn

BUILD-UP OF
INCREMENTAL INVESTMENT

x% Share of total incremental jobs

KEY OUTCOMES
• Total energy technology capex is around USD 35 bn). Additional investment in the industry and
410 bn in the BAU scenario; total capex rises buildings sectors makes a smaller contribution
by a further USD 140 bn in the NZE scenario, to to the additional capex needs.
around USD 550 bn. • The majority of the additional capex needs arises
• The majority of this capex growth is driven by from 2040 as growth in energy demand and the
additional investment in the power sector (USD shift to lower-carbon energy technologies are
80 bn additional capex) and transport sector (USD highest in this later period

Source: SEforALL analysis

26
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Net zero requires around USD 24bn in

cumulative additional spending over BAU
between 2020 and 2060

CHANGE IN CUMULATIVE SPENDING NZE VS BAU CHANGE IN CUMULATIVE SPENDING NZE VS BAU
2020-2060, USD bn 2020-2060, sectorial view, USD bn

KEY OUTCOMES
• Total capex and O&M are around USD 140 bn and • The majority of the fall in fuel costs occurs in
USD 65 bn higher than under BAU, respectively; the transport and power sectors. In the power
while fuel costs are around USD 180 bn lower sector spending is around USD 45 bn higher than
under BAU; while in the transport sector the fuel
• The majority of the additional capex spending
cost savings outweigh the increased capex, with
occurs in the power and transport sectors, with
spending in this sector around USD 65 bn less
some additional capex spending in the industry
than under BAU
and buildings sectors

1
Electricity and hydrogen are not allocated to end-uses
Source: SEforALL analysis

27
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

The additional investment could also

support around 400 thousand additional
jobs in 2060 across the economy

NET ADDITIONAL JOBS FROM KEY ENERGY SECTOR

INVESTMENT IN 2060 NZE VS. BAU by sector, ‘000 jobs

x% Share of total incremental jobs

KEY OUTCOMES
• As with economic activity, transport sector • Power sector investment also supports a
investment supports the majority of the additional significant number of additional jobs. The
jobs. The investment directly supports around investment directly supports 172,000 jobs in the
112,000 jobs in the construction (25%) and construction of renewable generation assets as
maintenance (75%) of electric vehicle charging well as 20,000 indirect and 50,000 induced jobs.
and hydrogen fueling infrastructure, as well as
3,500 indirect and 10,000 induced jobs in the
supply chain and wider economy.

1
Direct impact refers to contribution of the first level of (immediate) suppliers of the specific sector, has not been included as investments in
target subsector do not significantly increase the output. Indirect effect refers to contribution of suppliers of suppliers of the specific sector;
while induced refers to contribution of spending by employees employed directly and indirectly by sector and its suppliers
2
Equivalent to 2% of Ghana’s active population in 2060 (45% active out of 58 million people)
3
Includes Hydrogen, buildings and industry sectors
Note: Positive value refers to job creation, while negative value refers to job loss
Srouce: SEforALL analysis

28
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Capital raising

A combination of private sector capital and de-risking

instruments could help finance Ghana’s energy transition

NON-EXHAUSTIVE

CORE FINANCE PROVIDERS PROVIDERS OF DE-RISKING INSTRUMENTS

e.g., guarantees/insurance, first-loss-capital, etc.
Private sector Domestic International institutions
public sector
Actors Commercial Corporations Households Public Multilateral Bilateral National Green Private
financial and institutions DFIs1 DFIs1 DFIs1 finance foundations
institutions individuals funds
Examples Ghana BHP Billiton N/A Ghana World Bank French Development Green Rockefeller
Commercial Ministry of Agency for Bank of Climate Foundation
Royal Dutch African
Bank Finance Development Ghana Fund
Shell Development ClimateWorks
FirstRand Bank UK FCDO Global Foundations
Bank Environment
USAID Bloomberg
Facility
BNP Paribas
GIZ IKEA
Adaptation
Blackrock Foundation
Fund
Pimco Bezos Earth
Clean
Fund
Major pension Technology
funds Fund

RETURN ECONOMIC RETURNS

FOCUS ENVIRONMENTAL IMPACT

1
Development finance institutions
Source: Climate Policy Initiative, expert interviews

29
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Capital markets could provide the

largest funding pool, but some project
archetypes might require de-risking to
become bankable
Agent responsible for deployment: Private Public

Potential level of support by financing source/estimated level of de-risking required: High Medium Low
NON-EXHAUSTIVE

SECTOR PROJECT TOTAL FINANCING AGENTS TYPICAL FINANCING SOURCES Need for COMMENT /
ARCHETYPE NEED USD BN RESP. FOR OVER THE NEXT 10 YEARS derisking RATIONALE
DEPLOYING
UP TO 2035 2035-60
INVESTMENT Comm. Corp. House- Dom.Pub.
FL holds Sector
Industry 1. Industrial CC(U)S SOE and/ Could be attractive
0.9 25 or private to int’l capital as
companies technologies mature
2. Green steel facili- Private Could be attractive
ties, incl. scrap steel companies to int’l capital as
0.1 2
(electric arc furnaces, technologies mature
gas/H2 DRI)
Transport 3. Electric cars and Consumers Domestic debt market,
2/3 wheelers 3.0 110 complemented with
government subsidies
4. BEV or FCEV bus SOE and Existing infrastructure
fleet 1.9 30 private is partially government
companies owned (50%)
5. Electric trucks Private Scalable fleets (USD
0.5 105 companies 20+ mn) pot. suitable
for capital markets
6. Electric and H2 SOE and/ Public-private
vehicle fueling or private partnerships for
0.2 25
infrastructure companies deployment in key
locations
Cooking 7. Clean Private Currently difficult to
cookstoves1 0.5 1 companies scale
and consumers
Power 8. Grid SOE and/ Existing infrastructure
infrastructure or private is government owned
2.7 45
and distribution companies
connections
9. Mini-grid Private Scalable projects (USD
solutions / off-grid 1.9 1 companies 20+ mn) pot. suitable
solutions for capital markets

1
Includes electric, LPG, and improved biomass technologies
2
Includes solar, wind, hydro, geothermal, and hydrogen
3
Includes gas, gas with CCS, biomass with CCS, and nuclear;
4
Assumption: the same electrolyzers are used for balancing and industry end-uses;
Sources: SEforALL analysis; Better Guarantees, Better Finance, Blended finance Taskforce (2023); Financing Clean Energy Transitions in
Emerging and Developing Economies, IEA (2021); expert interviews

30
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

SECTOR PROJECT TOTAL FINANCING AGENTS TYPICAL FINANCING SOURCES Need for COMMENT /
ARCHETYPE NEED USD BN RESP. FOR OVER THE NEXT 10 YEARS derisking RATIONALE
DEPLOYING
UP TO 2035 2035-60
INVESTMENT Comm. Corp. House- Dom.Pub.
FL holds Sector
Power 10. Utility scale SOE and/ Medium (USD 20-50+
Continued renewables2 power or private mn) to large scale
plants 9.8 55 companies (USD 50+ mn) projects
attractive for int’l
investors
11. Utility scale SOE and/ Limited appetite
fossil and other or private from int’l investors &
2.3 25
conventional3 companies providers of de-risking
power plants instruments
12. Batteries for Private Scalable projects (USD
balancing 0.0 60 companies 20+ mn) pot. suitable
for capital markets
Hydrogen 13. H2 production Private Scalable projects (USD
and storage (green 0.0 4 companies 20+ mn) pot. suitable
and blue)4 for capital markets

31
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Blended finance and other de-risking

instruments can help reduce perceived
investment risk and attract private capital

KEY DERISKING INSTRUMENTS

NON-EXHAUSTIVE

RISK

MACRO CREDIT TECHNICAL MARKET

POLITICAL/ CURRENCY CREDIT LIQUIDITY DEMAND CONSTRUCT- OPERATIONAL LACK OFF-

COUNTRY RISK RISK RISK RISK ION RISK RISK OF TAKE
RISK PIPELINE TISK

1. Guarantees
2. Insurance

3. Hedging
INSTRUMENT

4. Junior/
subordinated cap
5. Securitization

6. Contractual
mechanisms
7. Results-based
incentivies
8. Grants

Source: Better Guarantees, Better Finance, Blended finance Taskforce (2023)

32
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

Implementation plan

To successfully implement the net-zero ambition, a best-practice

governance structure, process, and action plan is needed

Net Zero ambition

Integrated target(s) for the country –
incl. ambition, regulatory requirement

Level 1:
Target setting
Energy Transition and Investment Plan (e.g., sectoral targets and plans,
expected financing needs, and plan for how to mobilize)

Sectoral pathways (e.g., power, transport, industry) Level 2:

Coordination
and enabling
New value-chain development (transversal across sectors,
e.g., hydrogen and electrification)

Holistic impact tracking (e.g., implementation of initiatives/policies, Level 3:

tech penetration levels, socio-economic, fiscal, security of supply)
Implementation

POWER INDUSTRY TRANSPORT COOKING WASTE AFOLU

inc. water

Level 1: Target setting. A national Net Zero ambition Level 3: Implementation. Private and public
provides an overall target and vision for the country. actors responsible for the implementation at the
The more concrete the end goals are, and the more sector level (mandates, price incentives, controls,
clear the country is on the required pre-requisites to enablers). This includes sectoral pathways with clear
achieve them, the better private and public actors mechanisms to ensure policies are owned by the
can act in accordance to them. relevant ministries (but roll up to the overall target).
Level 2: Coordination and Enabling. An integrated It also includes the development of new technology
Energy Transition and Investment Plan (ETIP) ensures and fuel platforms for themes that transcend sectors
transparency and coordination across the ministries, – such as like Carbon Capture and Storage. And
and sectoral policies are consistent with national it includes holistic impact tracking, from tracking
objectives. This also includes organizing for success, emission impact and clean technology uptake, to
e.g. through the establishment of an Energy Transition optimizing socio-economic (“just transition”) and
Office that coordinates and drives progress. fiscal impact.

33
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

There are barriers to be addressed

across sectors to enable an orderly
energy transition
NON-EXHAUSTIVE

SECTOR IMPLEMENTATION BARRIERS ACTIONS REQUIRED

O&G • High cost of reducing oil • Regulation and standards:

and gas sector emissions, – Institute penalties per mcf of gas flared to ratchet up pressure for
particularly in refining operators to decarbonize
– Set mandatory gas flare reduction required for operating licenses renewal
• Price incentives or regulations:
– Create tax holidays for operators to invest in gas monetization
infrastructure and emissions reduction technology (e.g. LDAR, VRUs),
or investment in CCS (e.g. pioneer status)
– Co-invest or help finance required natural gas infrastructure (e.g. gas
trunk-line, treatment/processing infra) which in turn helps make it
attractive for companies to monetize the gas vs. flaring or re-injecting
• Enabling programs:
– Play orchestration role to launch collaborative decarbonization
projects (e.g. CCS hub pilot project) which would reduce the cost of
decarbonization to individual O&G operators
Industry • Cost premium of hydrogen • Regulation and standards:
DRI process due to shift from – Implement mandatory leak detection and repair requirements on gas-
coal or gas to hydrogen as a fired boilers to reduce methane emissions
reducing agent
– Set strict energy efficiency standards, especially for new construction
• High cost of CCS and/or major renovations, requiring the use of heat pumps where
applications in cement possible
production and high
• Price incentives or regulations:
temperature heat processes
– Develop framework to enable green premium capture (e.g. mandating
• Immature market and high
transparency and certification in production processes)
capital cost of heat pumps
for low-temperature heat – Develop incentive schemes that mitigates unprofitable share of
processes investments in new clean technologies (such as CCS applications)
• Enabling programs:
– Where possible, create critical mass for decarbonized products and
act as launching customer (incl. collaborating with manufacturers and
distributors to reduce costs and improve supply chain)
– Develop midterm infrastructure plans (especially around new-value
chains) to enable private-sector players to anticipate decarbonization
options available

34
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

(CONTINUED)

SECTOR IMPLEMENTATION BARRIERS ACTIONS REQUIRED

Transport • High cost of sustainable • Price incentives or regulations:

aviation fuels and low-carbon – Implement incentive mechanisms to drive uptake of low-carbon fuels
shipping fuels in aviation and shipping. Ensure infrastructure is in place to enable low-
• Deployment of electric carbon fuels usage near ports and airports
vehicles will depend on – Building on ambition of National Electric Mobility Roadmap,
consumer preferences implement incentive mechanisms to ensure consumers shift to electric
• High capital costs of electric and fuel-cell vehicles when cost-competitive (e.g. purchasing tax
and hydrogen vehicles credits, low-emission zones, vehicle trade-in programs, free parking,
lower vehicle registration costs)
• Limited charging and fuelling
infrastructure may slow • Enabling programs:
growth of passenger and – Develop and implement delivery plan for electric vehicle charging
freight low emission vehicle infrastructure (incl. grid assessment, regulatory framework, home
markets charging incentives, and partnerships with the private sector)
– Where possible promote further efficiency and drive behavioral shift
(e.g., to buses and trains)
Cooking/ • High energy costs of modern • Price incentives or regulations:
Buildings and low-carbon cooking – Provide grants, loans and subsidies to ease the requirements of capital-
solutions (LPG, sustainable
intensive investments (like electric stoves)
biomass, electricity)
• Regulation and standards:
– Set policies to reinforce adoption of modern cooking solutions (e.g.,
mandating electric stoves in urban new builds)
– Building on ambition of ECOWAS Refrigerators and Air Conditioners
Initiative, implement standards to improve energy efficiency of
electrical appliances
Power • At high volumes solar PV and • Price incentives or regulations:
and wind require battery storage, – Building on ambition of Renewable Energy Master Plan, create
hydrogen which carries a cost premium;
interventions to speed up deployment of especially solar PV and wind
and depress electricity prices,
potentially deterring investors (e.g., net metering framework, renewable energy projects incentives, etc.)
• Gas CCS carries capital cost • Enabling programs:
premium – Implement incentive mechanism for flexibility (for CCS in industry/
power, or batteries in micro-grids)

35
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

An Energy Transition Office could ease coordination and

implement a detailed roadmap that brings together actions
ILLUSTRATIVE EXAMPLE OF AN IMPLEMENTATION ROADMAP Owner: Sectoral Coordinating body New value chains / Decision point

+6 MONTHS +12 MONTHS +18 MONTHS +24 MONTHS

PREPARING THE PATH DETAILING THE PATHWAY INTEGRATE AND SCALE LONG-TERM VALUE

Sign-off on Sign-off on Sign-off Confirm Take decisions/ Assign owners Take first decision
business sectoral on sector special actions on to write or on trade-offs
as usual targets and pathway envoys from quick win amend law(s)
scenario vision transversal requirements for priority
themes

Define sectoral vision Assign owners in sector Understand requirements Write laws to capture quick wins
and targets to drive roadmap to enable quick wins
Assign sectoral owner to drive implementation

Develop implementation roadmap priority items Write detailed implementation plans Execute implementation plans and track progress (down to level of individual initiatives

Conduct annual evaluation Conduct annual evaluation

Further enhance pathway Further enhance pathway Further enhance pathway

(incl. non-energy action tracking)

Launch Energy Transition Office Monitor advancements and provide quarterly updates

Monitor advancements and provide quarterly updates

Frame investment
Formulate a project pipeline
case at project level
Actively seek private-sector investment for project pipeline

Prioritize quick win solutions Assign owners to Compile a list of no regret Draft comprehensive
that can help debottleneck new value chains actions and necessary steps execution strategies for
new value chain development (H2, CCS, etc.) for each new value chain every new value chain

Act on no-regret moves within trade-offs

Consistently monitor signposts to ascertain if new fuels or technologies are financially viable

36
SOCIOECONOMIC IMPACTS AND FINANCING NEEDS GHANA ENERGY TRANSITION & INVESTMENT PLAN

JOURNEY TO COP 28 & 29

SEP ‘23 Present ETIP at UNGA

NOV ‘23 Further showcase details at

COP 28

DEC ‘23 Establish and resource ETO

‘24 Develop sectoral level

implementation plans +
new value chains

JUNE ‘24 Develop project funnel

and investor engagement
at SEforALL Global Forum
and beyond

NOV ‘24 Present concrete projects

for investors at COP 29

37
DEVELOPED WITH
SUPPORT FROM