YESTERDAY marked another historic day in the drive for independent power generation with the formal signing of an agreement on the Kpone Independent Power Project (Kpone IPP) by three private entities — Cenpower Holding Company Limited, the Africa Finance Corporation (AFC) and Infraco Limited.
Under the agreement, the AFC is the controlling shareholder in the project, with 46 per cent controlling stake. It has, since its establishment in 2007, built the reputation as an African-led financial institution with a mission to improve African economies by proactively creating, developing and financing infrastructure, industrial and financial assets.
It has already invested in Ghana’s Jubilee Oil Field as the main African participant in a seven-year $750 million syndicated reserved base lending facility to develop the field.
Its entry into the Kpone IPP as the lead investor, perhaps, is ample testimony of its confidence in the economic potential and viability of the project and also the favourable investment climate in the country.
The Kpone project, which is wholly privately owned, was initiated by an indigenous Ghanaian company, Cenpower Holding, and is expected to add 340 megawatts to the country’s energy stock.
This is, indeed, refreshing news, considering the critical role energy plays in the development of a country. Considering our energy woes over the years, this project is timely and deserves whatever push it can be given by Ghanaians.
Indeed, while the government has been playing a major role in the provision of energy, it has always extended a hand to well-placed private entities to help in the provision of energy.
It is heart-warming to note that not only has there been a response from private entities but also at the heart of the initiative is an indigenous Ghanaian company.
The Kpone IPP is expected to utilise gas that will be produced when the country starts the commercial production of oil later this year and it is expected to be the largest privately owned power provider when it comes on stream by 2013.
But while this initiative is being hailed, the DAILY GRAPHIC needs to caution that there is the need to institute measures to ensure that the interests of private investors are protected.
The energy sector has largely been dominated by the government. It has been projected that the country has to increase its installed capacity from the present 2,000 megawatts to 5,000 megawatts by 2015 to help us meet our development targets.
As noted by the Director of Power at the Ministry of Energy, Mr Gabriel Quain, in order to meet that target, the private sector would have to be a key player.
The government has demonstrated that it is ready to promote the active involvement of the private sector in the energy sector and that is very commendable. Yet the issue of the introduction of realistic tariffs again raises some concerns, especially as private entities may not survive under the present tariff regime.
While the DAILY GRAPHIC wishes to strongly emphasise the need to ensure quality service delivery, it also wishes to ask whether it is enough to ask utility producers to produce quality service while not thinking about how good their coffers are.
This is an issue that requires dispassionate discussions and analyses and the DAILY GRAPHIC wishes to urge the relevant authorities to address it in earnest.
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