Cenpower Generation is set to add on stream a combine-cycle power plant of 350 megawatts to the country’s energy needs by the third quarter of this year.
The US$ 900 million project, a special-purpose vehicle created to develop the Kpone Independent Power Plant (KIPP) in the Tema industrial zone, is a combine-cycle gas turbine plant.
The Chief Executive of Cenpower, Mr Theo Sackey, said in an interview with the Graphic Business that the project would be the largest independent power producer in the country, accounting for some 10 per cent of the country’s total installed capacity and around 20 per cent of its available thermal-generation capacity.
When completed, it will be among the country’s most fuel-efficient thermal power stations, becoming a critical baseload component in meeting the country’s growing demand of electricity.
“This plant can provide sufficient power to deliver improved access to reliable and affordable electricity for more than eight million people”, Mr sackey said.
South African contractor Group Five took three years to build the plant and would sell all its output to State utility Electricity Company of Ghana under a 20-year off-take agreement.
The Electricity Company of Ghana (ECG) has agreed to buy Kpone’s electricity for 20 years, with the pricing being linked to the dollar to guard investors against a decline in the cedi, which has depreciated eight per cent against the dollar this year.
The country plans to add 2,500 MW to its grid by 2030, thereby increasing access to electricity even further. Most district capitals and villages in Ghana have access to the national electricity grid.
The additional power in Ghana could offset some of the energy backlog in West Africa where only 43 per cent of the population has access to a decent energy supply. The Cenpower project is, therefore, seen at reducing the backlog.
The country is reliant on expensive fossil fuel imports and many homes and businesses depend on polluting diesel back-up generators.
Frequent power outages have been exacerbated by unreliable rainfall impacting upon power supplies from the country’s Akosombo hydroelectric dam.
Attracting investors to the country’s newly deregulated energy market also presented challenges for the project.
There are equity holders in Cenpower Africa Finance Corporation subsidiary AFC Equity Investments, Cenpower Holdings, a consortium of Ghanaian investors, the Sumitomo Corporation, Mercury Power and FMO.
AFC executive director and chief investment officer and Cenpower project director, Mr Oliver Andrews, described the deal as a “shining example” of what could be achieved when Africa’s public and private sectors combined to enable the development of bankable energy infrastructure projects that were critical to the continent’s economic growth.
“Moreover, the fact that a near US$1-billion transaction has been largely financed by African institutions reflects the growing capacity of indigenous lenders and equity investors to begin to address Africa’s ongoing infrastructure deficit,” he said.
The Senior Project Manager of Sumitomo Corporation, Mr Wada Tomoyuki, stated that sub-Saharan Africa was growing in strategic importance for the group.
“In backing the Cenpower project, we look forward not only to providing our technological know-how and experience but also to contributing to Ghana’s development,” he noted.