The evolving energy diplomacy between Ghana and the Gulf states

Energy diplomacy is increasingly pivotal in shaping political alliances between Ghana and the Gulf states.

Investments in both oil and renewable energy sectors are fostering deeper economic ties and influencing geopolitical dynamics.

This is part of why Energy Minister John Jinapor (JJ) conducted a replica “Diplomatic Shuttle” to Dubai and Turkey within the blink of an eye after his successful vetting.

Oil Investments and Infrastructure Development

Ghana’s oil industry has attracted significant interest from Gulf nations. For instance, the Saudi Development Fund provided $12 million for the rehabilitation and expansion of Ghana’s Port of Takoradi, a crucial hub for offshore oil exploration and production.

Additionally, Saudi Arabia’s Red Sea Gateway Terminal was in advanced negotiations to develop a $120 million oil and gas service port in Takoradi, aiming to enhance Ghana’s oil export capabilities.

Renewable Energy Initiatives

The Gulf states are also investing in renewable energy projects within Ghana. Abu Dhabi’s state-backed Masdar has raised $1 billion through green bond issuances,   aiming to deploy 100 gigawatts of renewable energy capacity by 2030.

While specific projects in Ghana are not detailed, Masdar’s global investment strategy includes African nations, indicating potential future collaborations.

Strategic Implications

These energy investments serve multiple strategic purposes

Masdar, which is also known as Abu Dhabi Future Energy Co, has amassed a portfolio of projects that are either operational, under construction or under development, worth more than $30bn.

Masdar says the new bond proceeds will go “exclusively to new greenfield renewable energy projects”. “Every single dollar is going towards the development of a new renewable energy project,” Chief Financial Officer Mazin Khan, said recently.

Masdar is funded by the United Arab Emirates’s sovereign wealth fund Mubadala, its power and water utility Taqa, and its oil company Adnoc.

In 2024, it bought Greece’s biggest renewables company, Terna Energy, in a €3.2bn ($3.4bn) deal — and has said it is on the hunt for more acquisitions, indicating the future direction of the energy industry is in the renewable world.

Benefits of Diversifying Energy Sources for Ghana and African Countries

Energy Security and Reliability
Diversifying energy sources reduces dependence on a single energy type (like oil or hydropower), mitigating risks from supply disruptions due to global market volatility, geopolitical tensions, or climate-related challenges.

For Ghana, expanding renewable energy sources (solar, wind, and biomass) complements its oil and hydropower resources, ensuring stable and consistent energy access.

Economic Stability and Growth
A diversified energy mix attracts Foreign Direct Investment (FDI), particularly in renewable energy infrastructure, which can stimulate job creation, industrial growth, and technological advancement. Ghana can leverage this to reduce energy costs and support industrialization.

Climate Change Mitigation
Transitioning to cleaner energy sources lowers greenhouse gas emissions, aligning with global climate goals. Renewable energy adoption helps African countries such as Ghana, to meet their commitments under the Paris Agreement while mitigating environmental degradation.

Reduced Fiscal Vulnerability
Dependence on fossil fuels exposes economies like that of Ghana, to global price fluctuations. Diversifying into renewables protects national budgets from oil price shocks, stabilizing public finances and reducing fiscal deficits.

Technological Advancement and Innovation
Investment in renewables promotes the transfer of advanced technologies and skills. Partnerships with other African countries and global energy leaders can foster innovation in smart grids, energy storage, and efficient power distribution.

Rural Electrification and Inclusivity
Decentralized renewable energy systems (solar mini-grids, off-grid solutions) expand electricity access to rural and underserved communities, improving education, healthcare, and economic opportunities.

Regional Energy Cooperation and Integration
Diversified energy portfolios will enable Ghana and other countries to participate in regional energy markets, such as the West African Power Pool (WAPP), fostering cross-border trade, economic integration, and regional stability.

Resilience to Climate Impacts
Hydropower-reliant nations like Ghana are vulnerable to droughts.                Integrating solar, wind, and geothermal energy can buffer the impact of changing weather patterns, ensuring energy resilience.

Economic Diversification

Gulf states are leveraging their financial resources to invest in Africa’s energy sector, aligning with their economic diversification goals and reducing dependence on oil revenues.

Geopolitical Influence

By investing in Ghana’s energy infrastructure, Gulf nations are strengthening diplomatic relations, gaining political leverage, and expanding their influence in West Africa.

Energy Security

Collaborations in oil and renewable energy projects contribute to mutual energy security, ensuring stable energy supplies and fostering economic stability.

Solar ambition: Dubai’s $14bn Mohammed bin Rashid al-Maktoum Solar Park © Joshua A Bickel/AP

According the UK’s Financial Times newspaper published in January, “It looks like an image from science fiction: a 262m-tall lighthouse-style tower rising from the centre of hundreds of concentric circles of shining panels”.

But, if all goes to plan, these ambitious design renderings will become science fact, as the fourth development phase of Dubai’s colossal $14bn solar power park. In the fossil fuel-rich Gulf, however, the Mohammed bin Rashid al-Maktoum Solar Park, as it is known — which was begun in 2013 and is largely up and running — remains an outlier. Overall, the region’s renewable energy investments have lagged behind China, the US and Europe.

Relevance to Ghana and Africa

The Mohammed bin Rashid Al Maktoum Solar Park serves as a model for large-scale renewable energy projects, particularly for African nations like Ghana. With abundant solar resources, Africa can adopt similar initiatives to enhance energy security, drive economic growth, and mitigate climate change impacts.

Collaborative efforts between the UAE and African nations, leveraging technology and expertise from projects like the solar park, could accelerate renewable energy adoption across the continent.

Economic and Strategic Importance

Job Creation and Innovation

The project has created significant employment opportunities in the renewable energy sector, fostering innovation in energy technology and infrastructure.

Global Leadership

The Mohammed bin Rashid Al Maktoum Solar Park underscores the UAE’s leadership in renewable energy, positioning it as a global model for sustainable energy development.

Energy Security

By reducing reliance on fossil fuels and diversifying its energy mix, the UAE strengthens its energy security and reduces vulnerability to global oil price fluctuations.

Key Highlights

Scale and Capacity

The solar park aims to achieve a total capacity of 5,000 MW by 2030, making it one of the largest solar energy projects globally.

As of January 2025, the park’s phased development has achieved milestones in both photovoltaic (PV) and concentrated solar power (CSP) technologies.

Technology

The park utilizes both PV panels and CSP.

The CSP plant includes a central tower system with a capacity of 700 MW, which is one of the largest CSP projects globally.

24-hour economy

Thermal storage allows energy to be stored and supplied during the night, offering a consistent power supply. A good example for our 24 hour economy project to have regular uninterrupted source of energy.

Cost Effectiveness

The park has set world records for low solar energy costs, demonstrating the potential of renewable energy as an economically viable alternative to traditional energy sources.

Environmental Impact

The park is expected to reduce over 6.5 million tons of carbon emissions annually, supporting Dubai’s Clean Energy Strategy 2050, which aims to produce 75% of Dubai’s energy from clean sources by 2050.

Smart Technology

The solar park integrates smart grid technologies, artificial intelligence, and automated systems to optimize energy production and distribution.

In its 2024 report on energy investment, published recently, the International Energy Agency said the broader Middle East, including countries such as Iran and Iraq, was allocating just 20 cents to renewable energy investment for every dollar spent on fossil fuels — or one-tenth of the global average. The IEA added that, of the $175bn the region was expected to invest in energy projects in 2025, just 15 per cent would go to clean energy. The oil and gas reserves sitting below the Gulf states have previously discouraged any rapid development of renewable energy.

Ghana’s Energy minister John Jinapo recently enplaned to Dubai and Turkey, purposely to reactivate the existing sources of energy supply, Diesel oil in particular, so that it will not affect energy support for Ghana’s industries

He explained government is looking for funds over $100m to purchase emergency cargoes to ensure immediate delivery for storage. VRA is also to nominate light crude oil from Nigeria as back up. Currently as a result of a revenue short fall to purchase fuel to supply existing power plants for energy production, the IPPs are unable  to procure fuel for the power plants.

Conclusion

The evolving energy diplomacy between Ghana and the Gulf states underscores a strategic partnership that extends beyond economic investments. As both regions navigate the complexities of global energy transitions, their collaborative efforts in oil and renewable energy sectors are reshaping political alliances and contributing to sustainable development.

By Issa Monnie

Communications specialist, CSR Practitioner, And Broadcast Journalist

Email: [email protected]

 

 

 

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