The Abu Dhabi National Energy Company has received approval from the Ghanaian government to expand the gas-fired Takoradi 2 (T2) power plant from 220MW to 330MW.
Construction will start this month and will be delivered by Mitsui & Co and KEPCO, under a $260m engineering, procurement and construction contract.
The expansion project has received project financing of $355m provided by World Bank Group member, the International Finance Corporation (IFC), and a consortium of international development finance institutions.
Volta River Authority (VRA), a Ghanaian utility, will buy the additional power output generated by the facility for a period of 20 years, under the terms of an existing off-take agreement.
The T2 power plant is owned by Takoradi International, a joint venture between Abu Dhabi National Energy subsidiary TAQA Generation International Operating Company, with a 90% stake. VRA has a 10% stake.
The expansion project will convert the existing plant to operate as a combined cycle power plant and is expected to reduce CO2 emissions in line with the government's initiative towards cleaner fuel.
Kweku Awotwi, VRA CEO, said: "The expansion is expected to save Ghana USD 30 million a year in fuel costs and will help ensure that the power generation capacity develops at a pace to meet Ghana's sustainable growth ambitions."
The expanded project is expected to be commissioned in 2015.