US$100m boost for Kpone power project

Indigenous bank, Fidelity Bank, is funding the installation of two gas-based thermal plants of the Volta River Authority (VRA) for power generation at a cost of US$100million, VRA’s Chief Executive Officer, Kirk Koffi, has said.

The project, known as the Kpone Thermal Power Project (KTPP) sited at Kpone in the Tema Metropolis, will generate 220megawatts of thermal power to augment what is currently being generated.

Kirk Koffi said the thermal plants, which were procured by government in 2008, had been lying idle till the Authority decided to install them to add more depth to the current installed capacity.

“Government procured these units some years back in 2007/2008, and they [the equipment] arrived in 2009. They have been lying idle for some time.VRA decided to source for funds from the commercial market to install those units.

“This is the first time that VRA has sourced funds from the commercial market to install those units because of the importance of additional generation to the system. We are dealing with Fidelity Bank to help us to raise the US$100million needed to finish the project,” he said.

Mr. Koffi, speaking to the B&FT said: “What Fidelity did was come up with a bridge-financing arrangement, which we have been using so far. Because we thought the project was going to delay, they gave us the bridge finance.”

The project is expected to be completed by the end of the year; however, commercial operations are expected to commence by February next year.

Out of the country’s total installed capacity of 2,846.5MW, the VRA generates about 75 percent of it from hydro and thermal sources. The mix includes VRA hydro, 47 percent; VRA thermal, 36 percent; VRA solar generation, 0.1 percent; IPP thermal generation 12 percent; and Bui hydro, 5 percent.

The development comes at a time when the country is faced with serious power generation challenges -- due largely to abrupt disruption in the supply of gas via the West African Gas Pipeline from Nigeria as a result of labour unrest in Africa’s most populous country.

Gas supply, which prior to the currently development had remained persistently erratic, is heavily relied upon to power the VRA’s thermal plants as well as Independent Power Producers (IPPs) plants.

The 200MW Sunon -Asogli Power Plant, which also relies on gas from Nigeria, has had to shut down temporarily as a result.

Current power demand at peak is about 1,850MW; however, the absence of gas has created a deficit of about 350 MW over the past few days.

The situation is compounded by the fact that four continuous years of good in-flow into the Akosombo Lake -- as a result of favourable rainfall pattern -- has been followed by poor water in-flow into the lake this year.

The water level for the past months has been about 4 feet above the minimum operating level of 240feet.

The VRA has had to reduce hydro-generation as a measure to preserve the integrity of the dam. Mr. Koffi reckons that a base addition of about 300MW is needed next year to ensure some stability in power supply.

“The two gas turbines have been installed; commissioning will be starting very soon. We are expecting first power by the end of year and the second unit by early next year, possibly February.

Commercial operation should begin by end of February. There are two gas turbines and each can give you an output of 110MW.

According to the VRA, it intends to do a steam add-on to generate an additional 110MW. “There are plans to get the necessary approval to do the steam add-ons with Alstom -- the original equipment manufacturer. During the period we are running the machine, they will be doing the steam-add ons,” said Mr. Koffi.