€300m local content for Ketu Power Project

The consultants of the proposed 2,000 megawatt Ketu Power Project (KPP) have apportioned €300 million of the total project amount of €2billion for local content participation (LCP).

The amount, which comes in the form of investments, goods, works and services, will be made available to local entities, whether private or public.

This was disclosed in Accra after the promoters and consultants, MacBaron Group and Finite Earth Consult respectively, discussed modalities to package the local content offering for Government, investors and the general public.

Outlining the financial structure of the project, the promoters indicated that the project will have a 30 percent equity and 70 percent debt structure.

Mr. Mayor Agbleze, lead consultant to the project, said “half of the 30 percent equity has already been taken by foreign partners of the project, and we have had to negotiate strongly to cede the other half to the Government of Ghana and other investors.

“The opportunity for local participation is time-bound, and whatever is left of the equity will go back to the foreign participants who are knocking hard on our doors,” he noted.

The project is a Combined Cycle Gas Turbine and Heat Recovery System intended as an efficient base load provider for Ghana and the West Africa Power Pool (WAPP).

The design will facilitate the use of piped natural gas from the West Africa Gas Pipeline when it becomes reliable, efficient and of good quality in the long-term from Nigeria and Ghana while the re-gasified Liquefied Natural Gas (LNG) train will be maintained as a strategic fuel feed stock.

The project will depend on the GRIDCo and WAPP grid in the short-term while pursuing a vigorous grid development and expansion in collaboration with WAPP in the long-term.

The 2,000 megawatt power plant comes in five modules fuelled by an on-shore 250 million standard cubic feet (mmscf)/day LNG regasification train, using Overhead Rack Vaporisers.

Earlier this year, the Chiefs and Elders of Ehi, Adzortsi and Torgbeve in the Volta Region gave a 4 km² parcel of land for the project.

The consultants expressed optimism that Government will assist the project, which will go a long way to alleviate the current energy crisis.

“The success of the Ketu Power Project will depend on proven technology, efficient management, reliable service and the traditional Ghanaian hospitality and hard work, rather than tariff margins,” he said.

He added: “the strength and commitment of the Power Purchase Agreement (PPA) will enable investors to meet their long-term debt obligations over the scheduled payback period.”

The €300 million provision for local content will be off-loaded through a brokerage firm or firms with opportunities for a competitive programme -- which can manage local content participation through the best, innovative and cost-effective brokerage mechanism.

The power project will involve the transfer of both financial and non-financial assets, including technology, human resources and intellectual capital.