power plantSunon Asogli Power Company (SAPC), one of the five independent power producers (IPPs) in the energy sector, says it will build a second power plant to generate 360 megawatts of electricity in the second phase of its power agreement with Government.

The plant will cost US$315million and be completed within a year, Mr. Li Xiaohai, Chairman of the company, disclosed to B&FT in an interview.

?SAPC has a strong interest in Government?s plan to develop 5,000 megawatts of power capacity to cushion economic expansion. As investors, we have the capacity to start and complete the project within a maximum of one year. The budget for preliminary works has already been approved,? he said on the sidelines of an energy forum organised by the Ghanaian German Economic Association (GGEA) in Accra.

The project, when completed, will see the company raise its electricity generation capacity to 560 megawatts to support the country?s mounting energy demand — reckoned to be rising at between 8-10 percent per annum. The company currently operates a 200-megawatt plant that was shut down last year due to the unavailability of gas from the West Africa gas pipeline.

Ghana?s electricity consumption rose from 1,664 megawatts in 2011 to 1,800 megawatts in 2012 — with the existing generation capacity just enough to meet this demand. The Ghana Grid Company Limited (GRIDCo), which manages the power-transmission infrastructure, has estimated that the country needs around 340 megawatts of reserve power capacity for contingencies — but that is not available at present.

To ensure that power generation keeps up with supply, about US$200-280million of investment in new power generation is required each year. Mr. Xiaohai said because Government is unable to provide this amount, private sector investment is critical for the power sector and Government must ?coordinate and organise the system, including how tariffs should be calculated and collected?.

It must also honour its payment obligations on time. ?Payment for supplies has been a major headache because it takes Government up to seven weeks to settle a month?s bill,? he said.

?We are owed in excess of about US$7million from last year?s operations. This is very high because we have an agreement that allows for a 45-48-day payment, after which it becomes a breach of contract.?

Mr. Li said the unavailability of gas is costing the company significantly due to the shutdown of its 200-megawatt plant which can only run on gas.

The company is however also targetting alternative power sources as it is currently undertaking feasibility studies into wind power generation, with plans to introduce two 300-megawatt coal-fired power plants to support economic needs.

Asogli, whose output accounts for 14 percent of Ghana?s total electricity generation, is jointly owned by Shenzhen Energy Corporation — an independent power producer in China, and China-African Development Fund (CADFUND), a special fund of the Chinese Government to support local businesses that want to venture into Africa.


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