The Board of Directors of the African Development Bank (AfDB) Group, through its private sector window, has approved a loan of US$60 million for the expansion of the Takoradi II thermal power plant expansion. This expansion aims at improving electricity supply and energy security in Ghana.
Ghana's economy has experienced tremendous growth in the last decade, increasing the aggregate demand for electricity and creating an energy challenge that has been primarily addressed by further electricity imports. The country's installed power capacity will soon be insufficient if additional capacity is not added to meet the expected increase in demand (6.5 per cent per year).
The project consists of the expansion of the existing 220 MW single cycle gas/fuel oil power plant to a 330 MW combined cycle by adding a 110 MW steam turbine to the exhaust vent of the existing plant which has been in operation since September 2000.
As mentioned by Ms Tas Anvaripour, the AfDB's Head of Infrastructure Finance and PPP, "this project is a model example of a "Green Growth" PPP project featuring a national utility investing alongside private sponsor.
The plant expansion is a landmark project for Ghana's economy as it will allow the country to continue its economic transformation to a middle-income country and improve the living standards of its population.
This high reliance on hydropower has exposed the country to the risk of inadequate supply resulting from frequent and increasing droughts during the dry season. Furthermore, the plant has recently been converted from primarily using heavy fuel oil to one in which the primary fuel is natural gas, to be sourced from the West African Gas Pipeline.
The plant is owned and operated by Takoradi International Company LLC which is 90 per cent owned by the Abu Dhabi National Energy Company (TAQA) and 10 per cent by the Ghanaian state utility, the Volta River Authority (VRA). In 2010, TAQA signed a Memorandum of Understanding with the Ghanaian government and the VRA in relation to the 110 MW expansion of the Takoradi plant.
Both TAQA and the VRA have broad experience in the power sector and in developing power generation in Ghana.