Energy crisis puts damper on economy Ghana

Apr 10, 1998 02:00 AM

The current energy crisis has cast a dark spell on Ghana's economy with most industrialists and mining companies battling against declining profits and low production levels. "I don't think that many industrialists will be looking for profits this year," says Andrew Quayson, an industrialist and former vice president of the Association of Ghana Industrialists.
Most Ghanaian industries are operating at levels far below installed capacities, since domestic power generation is down by 50 % due to the low water level in the Akasombo Dam.
Those who can afford, have resorted to the use of generators. But this option, said industrialist John Atta-Nyamekye, is expensive and "will dislocate the total cost of production. The only alternative (then) is to try and pass this cost on to the consumers", who already complain about the high price of locally-manufactured goods.

Since the start of the energy crisis in January, electricity consumers, mines and industries now receive power on a rotational basis -- known as "load shedding". Consumers receive power for 12 hours, followed by 24 hours of blackout which has hurt the industries and mines.
Last month, the newly constructed thermal plant at Takoradi in the western region suffered a setback when an explosion that occurred at one of its two turbines reduced by half the 220 MW of electricity it was producing.
Following the explosion and the subsequent loss in power, the Volta River Authority (VRA), the power generator in Ghana, ordered the mining companies in the region to reduce their days of operation to just two a week. Most of the mines in Ghana are located in the western region.
"That's a lot of reduction on the projected output for the year," John Bentum-Williams, chief executive of the Ghana Chamber of Mines told.
To try and ease the situation, Ghana is importing power from Cote d'Ivoire, but the amount now coming in is far below what Ghana requires to supplement its needs. According to Quayson, the idea behind imports is "to provide industry the possibility of guaranteed power -- 50 % from local sources and 50 % imports".

Ghana also has started to build power barges as a short-term measure to supply power to the industries and the mines. During the visit of President Bill Clinton last month, the two countries signed a $ 67 mm loan agreement to buy 2 power generating barges as part of efforts to alleviate the current energy crisis.
The barges, to be constructed in a U.S. shipyard under a turnkey contract with Westinghouse Electric Corporation, will be installed in Ghana's western region.
These barges will be fuelled by natural gas from Tano fields and are expected to be installed within 16 months. Ghana's National Petroleum Corporation (GNPC) has embarked on a project to produce electricity from gas from Tano fields in Ghana's western region.
Also during President Clinton's visit, KMR Power Corporation of K and M Engineering of the US, signed an agreement with the government for the construction of a $ 200 mmpower plant in Ghana. The 220 MW plant will be built, owned and operated by a KMR power-led consortium which includes Emerging Power Development Limited of the US and Marubeni Corporation.
The two main power purchasers of this facility will be the Ashanti Goldfields Company and the Electricity Company of Ghana, the main power distributor in the country.
Ashanti had earlier applied to KMR to build a plant to supply it with 100 MW of electricity, but the company said only a plant for 200 MW would be cost-effective to operate.
Worried by the increasing negative impact of the energy crisis on their operations, several of Ghana's mining companies are looking into ways to provide power to their mines.
According to Aarquaye Armah, energy adviser in the Ministry of Mines and Energy, a local group, Minergy Partnership, is co-ordinating the big mines in their efforts to get power for their mines. "Big consumers have decided to come together to buy power. They know that the private sector can do it to free money from the government," Armah said.

Source: not available
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