Workshop On Energy and Infrastructure

The Embassy of Ghana, in Washington D.C. recently organized a one-day

workshop on "Energy and Infrastructure in Ghana". The Workshop was amongst

the series of activities organized by the Mission to mark Ghana's 50 th

Anniversary Celebrations. Ghana like many West African countries has in

recent years been facing challenges in its energy and water delivery, as

demand far exceeds supply. It is in this light that the Embassy invited

experts and stakeholders to discuss the challenges facing the energy and

water sectors with the hope of brainstorming and making recommendations, on

how Ghana could develop its energy resources on a more sustainable basis.

Participants at the workshop included Senior Ministers of State, top

officials of Electricity Corporation of Ghana and Volta River Authority

(VRA), officials of Montgomery County (Department of Environmental

Protection), the EXIM Bank of USA, US Business Executives from Houston

(which happens to be the energy capital of the world) and friends of Ghana.

In his introductory remarks, H. E. Dr. Kwame Bawuah-Edusei, Ghana's

Ambassador to the United States noted that the importance of the workshop,

(which was taking place at a time Ghana was facing energy crisis) could not

be over-emphasized. He, therefore, expressed the hope that by the end of the

workshop, pragmatic short, medium and long term contributions would be made

to help address the energy challenges facing Ghana. Honourable Hackman Owusu

Agyemang, Ghana's Minster for Water Resources, Works and Housing, who was

the Chairman for the occasion, indicated that apart from being the only

haven of peace in the troubled West African Sub-region, Ghana had also put

in place, systems and modalities such as the Double Taxation Act and other

generous incentive schemes to attract Foreign Direct Investment which would

make Ghana a destination for potential investors. He lauded the current

excellent and cordial relations between the US and Ghana and said this

should encourage US investors to go to Ghana. He added that it had been

projected that Ghana would attain the status of a middle income country and

have access to 75% portable water by the year 2015. He, however, indicated

that one major setback had been in the area of energy and invited

participants to come out with suggestions that would help address Ghana's

energy problem.

Some of the observations and comments made during presentations included:

Ghana's energy portfolio had changed from pure hydro to a mixture

hydro/thermal. The thermal component in the mix was expected to increase and

dominate.

A major challenge to the energy sector was how to obtain investment capital

for expansion to assure reliable electricity supply in the future.

The challenges in the energy sector presented significant

investment/opportunities.

The development of the West African Gas Pipeline was expected to

significantly reduce thermal plant fuel cost whilst the West African Power

Pool was expected to open up electricity markets.

Future prospects for Ghana's electricity supply were bright in spite of the

short term challenges.

Over the next 5 years domestic demand for electricity was expected to grow

at an average rate of about 7.6%

An approximate amount of US $240.8 million was needed for the next five

years by the Electricity Company to revamp its operations.

Participants were also informed that some of the strategies that had been

put help address challenges included the installation of additional thermal

generation plants and the importation of power from outside; the importation

of millions energy saving lamps; intensification of Revenue Protection

Unit's activities to control and stem commercial losses; the installation of

prepayment metering system nationwide and the commitment of Public Utilities

Regulations Commission (PURC) to review major tariffs every 4 years so that

consumers could pay realistic economic tariff.

After a day of fruitful deliberations, the following

recommendations/suggestions were made by the participants as to the way

forward:

It was agreed Ghana could learn the from the success story of Montgomery

County (a County in the State of Maryland, USA) by diversifying its power

generation and not relying only on hydro and thermal. Montgomery County

presently depends on Coal ? 52.5%, Nuclear ? 37.20%, Gas ? 6.90%, Hydro ?

1.40, Oil ? 1.10 as well as methane gas, solid waste and wind compared to

Ghana's dependence on mainly hydro and thermal.

The EXIM Bank was in the position to provide potential investors in the

energy sector with the necessary assistance in the area of funding for goods

and services of US origin under the Banks Export Credit Insurance and

Guarantees schemes.

In view of the capital intensive nature of investment in the energy sector,

it was suggested that Ghanaians could internally form cooperative groups,

build up the necessary equity and then contact the EXIM Bank and other

financial sources for the necessary financial support to enable them invest

in the energy sector.

There was the need to explore waste to energy technology. Interested

potential investors present at the workshop were directed to contact the

Ministry of Energy and other relevant agencies in Ghana for further

discussions.

A proposal was put forward that to be able to attract independent Power

Producers, there should be tariff reform to reflect the actual cost of

production. It was noted, however, that was important to improve upon the

service delivery first before the upward review of tariffs. It was also

explained that the Government was ready and prepared to absorb any

additional costs that would be incurred by the Independent Power Producers

should they decide to invest in Ghana.

Government was to make it a major policy to build one power generating plant

every year depending on availability of resources.

The country should explore other types of renewable energy no matter how

insignificant its contribution would be to the national grid and

systematically develop and improve on them over the years.

There was an urgent need for an improvement in the distribution network by

the service providers and attention given to the regular maintenance of

equipment.

There was also the need for Government to be more aggressive in sourcing for

funds in view of Ghana's good credit rating.