Ghana's energy sector turns to the consulting industry once more

06 March 2018 3 min. read

Restructuring efforts are well underway in Ghana’s energy sector, and the Volta River Authority has launched yet another tender for consultancy services, this time to assist with optimization efforts in the Takoradi Thermal Power Plant in the town of Aboadze in Western Ghana. 

Consistent with a major gap in infrastructure funding across Africa, energy production across the continent suffers from inefficiencies and severe lack of capacity. This situation is perhaps best exemplified by the energy sector in Ghana, which currently suffers from debt of up to $2.5 billion.

The lack of revenues, and the consequent pile of debt, can be attributed to a lack of optimisation within the sector. The country’s thermal power generation units, for instance, operate at a mere 50-65% of their capacity, which is not even enough to cover the substantial maintenance costs for the plants.

In recent months, the Ghanaian government has been proactive in its efforts to rectify the issues, primarily through restructuring. Earlier this year, the government turned towards renewable energy, inviting support from the consulting industry to help with the implementation of the Scaling-up Renewable Energy Programme (SREP). The programme essentially involves the establishment of mini-grid and stand alone solar PVs electrification systems, which will provide energy to remote areas.

One organisation that is particularly prominent in the country’s energy sector is the Volta River Authority (VRA), a public sector power utility. The VRA controls an installed energy-generation capacity of nearly 2,500 Megawatts (MW), including 1,325 MW generated by the highly inefficient thermal units mentioned above.

Ghana's energy sector turns to the consulting industry once more

Last year, the VRA made a decision to rid itself of the inefficient plants, selling up to $2 billion worth of assets to the private sector. At the time, the VRA was assisted in the sale by leading firms from the consulting and legal spheres, including Big Four professional services firm PwC.

With the remaining thermal units, the VRA has begun optimisation efforts. Among these efforts are plans for the “rehabilitation, modernisation, and life extension” of the Takoradi Thermal Power Plant, situated in the town of Aboadze in Western Ghana. The plant first became operational in 1997, and has a capacity of nearly 600 MW, generated primarily through light crude oil.

In order to assist with the restructuring, the VRA has called upon the consulting industry yet again, inviting tenders from highly qualified consulting firms. The selected firm will be tasked with identifying the specific parts of the plant that require rehabilitation and modernisation, with the objective of achieving optimum output, sustainable for at least 20 years.

In addition, firms will advise on the most financially sound avenues to replace heavy equipment in the plant such as gas and steam turbines, as well as generators. In order to determine the above, the selected firm will also be required to conduct extensive economic analysis to present to the VRA, expected within six months of commencement.