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Africa-focused thermal and hydroelectric power developer and operator Endeavor Energy, infrastructure giant General Electric (GE) and water and electricity utility sector operating group Finagestion this week partnered to develop and implement the largest-single power park in sub-Saharan Africa by 2019.
The Ghana 1000 project would see the trio, which inked a joint development agreement this week, deliver an integrated liquefied natural gas- (LNG-) to-power project generating in excess of 1 100 MW of electricity to Ghana’s national power grid.
Finagestion, which would be part owner and operator of the facility on its completion, pointed out that this was the first time such a quantum of power would be produced from a single location in sub-Saharan Africa outside South Africa.
Further, the Ghana 1000 project was unique as an LNG-to-power project completed in an emerging market, said Endeavor CEO Sean Long this week.
“It is [also] important to Ghana because it will both add reliable baseload generation, as well as help lower the cost of power in the country when compared with plants currently running off expensive light crude oil,” he explained.
The generation of 1 000 MW on a single site was expected to yield “significant savings” as the power generation units could leverage the same balance of plants parts and staff, Finagestion chairperson Vincent Le Guennou agreed.
While current LNG prices were 35% lower than crude oil, gas shortages resulted in Ghana currently spending more than $1-million a day to buy light crude oil for power generation.
Ghana currently has an installed generation capacity of 2 412 MW and dependable generation capacity of 2 125 MW.
“So the impact of this project on the country’s economy cannot be understated,” Long said.
The consortium was currently in talks with a number of international suppliers for the importation of LNG to use as a dedicated fuel source for the project, while discussions continued with a Ghana-based trading company to handle the management and logistics of importing the LNG.
The project, which would be located in western Ghana, would be developed in phases, with the first phase delivering 360 MW of power in simple-cycle mode by early 2017.
When the first phase was completed in early 2018, it would generate more than 540 MW in combined-cycle mode.
The second and final phase of the project would be implemented before 2019, doubling the first-phase power output.
“The first phase of the project alone will require more than $20-million of development capital, over $200-million of equity from the project sponsors and more than $600-million in debt financing,” noted GE Africa president and CEO Jay Ireland.
The purely private-sector consortium, led by Endeavor Energy and GE, had zero direct financial injection from the government of Ghana, which was only responsible for creating an enabling environment and regulatory framework to allow the project partners to fast-track the generation of critically needed power to feed into the national grid.
“The Ghana government will facilitate and fast-track all approvals and permits and provide adequate credit enhancement in a transparent manner,” averred Ghana’s Energy Deputy Minister John Janakpor.
The government also committed to facilitate a long-term agreement with the State-owned Electricity Company of Ghana and potentially other power offtakers for the purchase of power from the project.