Business News of Tuesday, 12 December 2017
The 400-megawatt (MW) capacity Bui Dam has generated revenue of $335.7m ($335,701,964) since it started operations in 2013.
This amount is about 50% of the total cost of the project.
However, a substantial amount, which the Bui Power Authority (BPA) declined to disclose, is locked with the Electricity Company of Ghana (ECG) as debt since ECG, the off-taker of the power produced, could not pay for substantial power purchased.
$713.5m Chinese loan
The Chinese government, through China Exim Bank, provided a loan of $713.5 million ($713,572,123.3).
Ghana govt provided $76.5m
The Government of Ghana added a funding of $76.5 million ($76,508,013.70), making the total cost of the project $790 million ($790,080,137).
$343.8m concessional loan to be paid by BPA
Out of the $713.5 million provided by Exim Bank of China, $343.8 million ($343,859,122.95) is a concessional loan to be paid by the Government of Ghana to the Chinese government.
$369.7m buyers credit to be paid by BPA
The remaining $369.7 million ($369,713,000.35) is a buyer’s credit which Bui Power Authority is required to pay back.
BPA has repaid $139.4m to Exim Bank
The authority has so far paid back $139.4 million ($139,428, 234.82) since November 2013, leaving a balance of $230,284,765.71 to be paid. The loan contracted from the China Exim Bank has a grace period of five years and an amortisation period of 20 years.
Chief Executive Officer (CEO) of BPA, Fred Oware stated that the figures demonstrate clearly that the Bui Dam is a very profitable and worthwhile investment, and questioned why some sections of the public erroneously describe the project as a white elephant.
He said the authority has never defaulted in the repayment of the loan, and was optimistic that once ECG makes full payment, the loan could be repaid long before the period for repayment ends.
Even though government is paying the $343.8 million concessional loan to the Chinese government, an agreement has been signed between BPA and government which required BPA to pay this money to government after fully paying the buyer’s credit to China Exim Bank.
Ambitious renewable energy plan
Oware noted that BPA has appropriately positioned itself to become the renewable energy leader to provide green energy for the country if allowed to implement the plan.
According to him, BPA has expanded its focus to renewable energy, which was in line with the government’s vision of increasing the renewable to about 10% of Ghana’s energy mix.
500MW of renewable energy
In view of this, he stated that BPA should be looking at adding at least 500megawatts (MW) of renewable energy to the country’s energy generation. BPA to develop 250MW renewable energy
In this regard, he said, the BPA had expanded its switchyard at the Bui Generation Station (GS) to accommodate 250MW of solar-generated power. “We have finished the testing and commissioning of 250MW switchyard facilities purposely built to evacuate solar power.
“We are certain that construction works will start in the first quarter of next year in modules of 50MW pv solar park per project,” Oware said. The remaining 200MW would be developed in lots of 50MW to assist BPA in managing the project.
He said BPA has told all investors that a kilowatt of power should not cost more than 8 cents since current technology makes solar power cheaper.
As a result, he said BPA will be the first hybrid generation institution by the end of 2018, combining hydro and solar power generation.
“The authority intends to train more of its engineers and other staff in pursuing and accomplishing this very important task of meeting the Ministry of Energy’s target for renewable energy generation,” he added.
He said adequate lands had been demarcated for solar parks to support the programme, stating that compensation to farmers had been settled whilst permitting and licensing procedures were being followed.
To further this renewable vision, he announced that BPA was prospecting six possible sites for solar generation in the Northern, Upper East and Upper West regions.
30Kilovolts generation from the Tsatsadu Falls
In view of this, the BPA was commencing a 30-kilovolt (kV) generation from the Tsatsadu Falls in the Volta Region, and was working with GS-WIND and the University of Ghana on wind energy generation.
Oware said: “Our mandate to provide renewable energy for the National Interconnected Transmission System (NITS) has spurred us on to developing a firm foundation to meet the government’s objective of achieving at least 10 per cent of the national electricity load being of Photovoltaics (PV) energy by 2020”.
He said, additionally, some appropriate sites in the Northern, Upper East and Upper West regions had been acquired to ensure that solar parks were not concentrated at one location.
He said over a five-year period, there would be significant increase of pv energy in the power mix for the country.
With regard to the Bui Hydro-Generating Station, Oware said it had three generating units, with each having a capacity to generate 133MW of power and a mini-plant of 4MW, totalling 400MW.
He said the commissioning of the 400MW Bui Generating Station in December 2013 thus added about 20 per cent of installed hydro capacity to Ghana’s energy production.
He said Bui Generating Station had, since its inauguration, been generating averagely 220MW of power daily.
Oware said BPA was currently in contractual talks with Sinohydro to ensure that for the next five to 10 years, they would assist BPA to carry out its major maintenance and procure spare parts for the various components of the Bui Generating Station.
The idea to construct the Bui Dam was conceived by British-Australian geologist Albert Ernest Kitson, in 1925.
Even though there was a plan to begin its construction in the 1960s when the Akosombo Dam was constructed further downstream on the Volta River, it did not materialise.
It was in 2005 that the John Agyekum Kufuor government took the decision for the dam to be built.
The construction became a reality when a Chinese company, Sinohydro, submitted a bid with funding from the Chinese Exim Bank.