Ghana plans Partial privatization of thermal plants to boost electricity production

Ghana plans to partially privatize three thermal power plants through stakes sale in order to reduce its debts and boost electricity production in the country that has suffered almost three years of planned power outages.

Moving ahead with its plans, Ghana has identified fossil fuel-burning plants that are capable of producing a combined 501 megawatts, one-third of the country’s total thermal power-generating capacity, that it will partly privatize, stated the head of revenue monitoring at the Energy Ministry, James Demitrus on Tuesday.

Ghana’s thermal generation capacity is about 1,451 megawatts, 1,325 megawatts in addition to the hydropower facilities at the Akosombo and Kpong dams, while, state-run thermal plants are operating at 50 percent to 65 percent of capacity, with 80 percent the target.

With the stakes sale, the West African country looks at its thermal power plants because it is capable of burning oil or gas to generate electricity, although the country’s hydro-power can also produce 1,180 megawatts.

Demitrus stated that “ the plants are not very efficient, they have been lying idle for close to one year and after those debts are cleared the government does not want the cycle to be repeated.”

The plants being offered for part-privatization include a 125-megawatt thermal plant in the port city of Tema belonging to the state pension fund, and Volta River Authority plants (VRA), the state power produce in Kpone and Tema that have installed capacities of 250 megawatts and 125 megawatts respectively, Demitrus added.

Other VRA plants are not up for investment because some are relatively efficient while others already have private partners, However, investors are expected to boost the plants up for investment by a third, said Demitrus.

Economic growth of the West African country under former President John Mahama administration, was slow for about three years due to planned power outages that could last up to 24 hours.

The Ghanaian economy, however, has shown sign of improvement since the coming to power of the present administration, as the government is seeking ways to reduce its debt in the power industry and make state-owned companies profitable.

In 2016, the government started selling bonds in part to pay off state accumulated loans of a combined 10 billion cedis ($2.3 billion).

Ghana’s economy is projected to expand by 8.3 percent this year which may likely boost demand for electricity,  the World Bank said.