Examining Ghana’s Gas Investment: Could It Result in Sustained Fossil-Fuel Debt?

West African country is enduring hard times – and critics say plan to import liquefied natural gas will only make things worse

John Gakpo has milled corn to make kenkey – a cornmeal dumpling and Ghana’s staple food – in a dimly lit wooden shack in a suburb of the capital, Accra, for 15 years. In the past, his earnings have been sufficient to provide for his family – but not any more. Once the poster-child economy for westAfrica, Ghana is suffering from its worst economic crisis in a generation. The debt-laden nation is gripped by soaring inflation and a depreciating currency that has pushed it to default on some of its debt payments. “Times are hard,” said Gakpo. His electricity bill has doubled in a year. To cope, he has had to cut back on buying food for his family.

Yet opposition politicians, energy analysts and local NGOs have warned that plans to import liquefied natural gas (LNG), a fossilfuel, under a 17-year agreement with oil giant Shell could make things worse. The agreement, they say, could push up electricity prices, hamstring the transition to renewableenergy and perpetuate a cycle of fossil-fuel related debt. Ghana is heavily relying on gas to meet its growing power needs. Gas generates half of its electricity, while less than 1% comes from solar. The government argues importing LNG will shore up Ghana’s energysecurity, power the country’s industrial development and displace dirtier and more expensive heavy fueloil.

Ghana’s electricity demand is projected to double between 2022 and the early 2030s. The project consortium says gas will need to meet virtually all of this additional demand. To do so, it is constructing a $400m (£316m) LNG terminal, funded by private equity investors and supported by development finance institutions. Project partners say the terminal could turn Ghana into a hub for providing LNG to the west Africanmarket. But critics have denounced the project as an example of how mismanaged gas and power investments in Ghana are financially crippling the country and failing to deliver reliable and affordable energy. They have urged the government to suspend the project. LNG requires gas to be to liquefied, shipped and then regasified. This energy-hungry process makes LNG more carbon-intensive than ordinary gas and increases the risk of leaking methane – a potent greenhouse gas contributing to climatechange. Like many other African nations, Ghana has identified gas as a transition fuel to cleaner sources. But Omar Elmawi, of the Don’t Gas Africa campaign, said locking countries into new and expensive gas projects was “perpetuating a cycle of dependence on fossil fuels”. “Rather than investing in LNG terminals and pipelines, we should be prioritising renewable energy sources that can provide clean, affordable, and sustainable power to uplift the over 600 million Africans that are energy poor,” he said.