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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