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Thursday, 3 July 2014

GE, Endeavor Energy and Finagestion team up to boost Ghana's power supply

US Energy giant, General Electric and its partners, Endeavour Energy and Finagestion, have signed a joint development agreement for the Ghana 1000MW Power Project, aimed at adding 1,000 megawatt of thermal power to Ghana’s installed electricity capacity.

The agreement was signed at the offices of the Energy Ministry by General Electric’s Vice-Chairman, John Rice; Finagestion’s Chairman Vincent Le Guennou; and CEO of Endeavour Energy, Sean Lang.

The Ghana 1000MW Power Project Conglomerate is a purely private sector, independent power producer initiative with zero direct financial contribution from the Government of Ghana. The project will combine the construction of an integrated gas-to-power thermal plant, currently underway, and a regasification unit with future importation of liquefied natural gas (LNG) which makes the production of power relatively cheaper and safer.

The John Mahama administration in Ghana has promised to double Ghana’s energy generating capacity to 5000 megawatts of power by 2016.

The first of the two-phase projects, which will cost approximately $900 million and expected to be executed within a period of two years, is to start power delivery in early 2017 with an initial 360 megawatts of electricity in a simple cycle mode.

Upon completion of the initial phase in early 2018, it is expected to produce more than 540 megawatts of electricity in a combined cycle mode, with the second phase anticipated to commence before 2019. This will be in addition to another hydro power plant, the $980 million 400MW Bui Dam which is under construction and should be completed by the end of the year 2014.

The first phase of the project alone will require more than US$20million of development capital, over US$200million of equity from the project sponsors, and more than US$600million in debt financing,” said Jay Ireland, CEO and President of General Electric Africa.

The over-US$1billion project, to be located in the Western Region, includes a Floating Storage and Regasification Unit to facilitate importation of Liquefied Natural Gas (LNG) for power generation. The importation of LNG as part of the project will cut out the challenge the country currently has of having generation plants without gas to power them. The use of LNG is also expected to reduce the cost of generation as compared to light crude oil.

“Current LNG prices are approximately 35 percent less than light crude, yet most thermal plants in Ghana run on it due to shortage of gas,” said Sean Lang, CEO of Endeavour Energy, the company that will co-lead the project’s development.

The Chief Executive Officer of GE, Mr Jay Ireland, said that the project would set a new standard for the way that power would be delivered in Africa.

Speaking on behalf of the Ghana of Government, the deputy Minister of Energy, Hon John Jinapor said: “We thank the Ghana 1000 partners for keeping their commitment to support government efforts to boost electricity generation and lower the cost of power in Ghana.

“The Ghana Government will facilitate and fast track all approvals and permits and provide adequate credit enhancement in a transparent manner,” he added.

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