|
 | 
 VOLTA RIVER AUTHORITY (VRA)
Interview with
Mr. Gilbert Ohene Dokyi,
Chief Executive
October 4th 1999
Contact:
P.O.Box MB 77, Accra - GHANA
Tel: (233 21) 66 49 41 – 22 11 24
Fax: (233 21) 66 26 10
Telex: 2022 VOLTA GH
E-mail: orgsrv@accra.vra.com
|
Could you give us a brief historical background of VRA?
VRA was established by an act of parliament (Volta River Development Act, Act 46 of 1961) to develop and harness the Volta River to generate and transmit power to VALCO, the mining sector, industry and to residential and commercial customers of Ghana.
Akosombo was commissioned in January,1966 by the first president of Ghana, President Kwame Nkrumah. At that time only four turbines were commissioned. Six years later two more machines were added to bring the total installed capacity of Akosombo to 912 Megawatts. As the load increased it was felt that another plant should be developed 40 kilometres downstream of Akosombo. This is the Kpong Hydro-electric Project. That has four turbines and is capable of producing 160MW.
In the mean time when Akosombo was brought up to 912MW installed capacity the load requirement of VALCO, Ghana and the industries was such that we had a lot of surplus. So a line funded by CIDA was constructed from Akosombo to Lome and to Cotonou for VRA to supply the two neighboring countries with power in 1972. Since then Togo and Benin have built the Nangbeto Hydro-electric Plant to supplement the supply from Ghana. Also, when Kpong was brought on stream a line was built to Cote d’Ivoire under an interconnection arrangement between the two power systems. So, from Abidjan through Accra to Lome to Cotonou there is an electrical connection.
And in the early years because Akosombo and Kpong depend on rain, when the rains did not come we had problems. At that time Cote d’Ivoire also had electricity from hydro, but mostly from thermal. Whenever they had a problem we supplied them power because we had surplus up to the early '80’s. In any year when they had surplus power through excess inflows, they would come and store the excess in our lake and we would give it back to them the following year and retain a portion of the energy so stored for storage fees. In other words the lake here is a repository for power in the sub-region.
For a long time Ghana depended on Akosombo, and Akosombo also depends on providence. In the 1983/4-drought, VRA was forced to look into other alternative sources of generation for offsetting this idea of having water one year and no water the following year and we came out with the idea of thermal complementation. It is a very simple concept. You have a thermal generation stand-by as insurance in bad hydrological years. Again because you had a backup you could take out any amount of water from the lake so that when you had a major rainfall season as we have this year you could fill the Lake again. But it did not sit well with our countrymen because everybody felt that thermal power as such was expensive. We had to import the fuel and we did not yet know anything about the technology. We had to fight for this to be accepted because we knew that was our salvation. Every 7-10 years you get into the dry cycle no matter what you do. Last year we were so unlucky that when we had the drought Takoradi was then coming up. So it could not wipe out all the problem. Even so we were able to handle the situation quite well.
With Takoradi we can now say that we have got the complementation there to support Akosombo. This year we have had very good rains, next year we will still need power from Takoradi because of the enormous load demand. We have also an extensive transmission system throughout Ghana. In the South of Ghana it goes round in a loop to pick up all the mining loads in the western part of Ghana, then it comes along the coast to Tema, back to Akosombo, to Kumasi.
In the late '80s we did a lot of studies because the load in the Northern part of Ghana is very small and electricity is such that if you have a very long line serving a small load you end up having high voltages at the end of the line. This required a lot of studies. Fortunately, we found a solution. We were granted a loan by the World Bank and the Grid was extended to Bolgatanga. It went to Sunyani, Techiman, Tamale and Bolgatanga with extensions to Yendi. Later on we had additional loans to extend Grid power to district capitals.
Who are the main shareholders of the company today?
VRA is solely owned by the government of Ghana but a Power Sector Reform seeks to encourage Independent Power Producers to pitch in Ghana and supply power. We are going to have competitors. Everybody perceives us as a monopoly but that has been broken. Because of that the transmission line has to be made available to all who want to use the line to do business. There can be only one Grid. Today we own it but that will change. Independent operators will need open access to it.
In future the transmission business will be privatized. But the thermal plant, which has come in as a new component, lent itself to privatization. The only little difficulty is that since it was constructed with soft loans, approval to privatize has to be obtained from all the loan agencies.
In the mean time because of the drought we had in 1997 we were forced to fast track an expansion to the Takoradi Plant which we call T2 and that is being implemented with private capital. VRA is supposed to have 50% shares but we do not have the money so we have only 10% now. We have two turbines being installed, one is under construction and it should be delivering power by 1st March, the other one is coming on in September 2000. That may come as a big achievement because it is being built solely from equity. Together with our partner CMS, we have a company called Takoradi International Company (TICO). VRA and CMS are now regrouping to discuss matters relating to the acquisition of T1 which was done for VRA through soft loans.
| Can you give us some more statistics about VRA; how much energy you produce per year, number of staff and your current turnover?
The peak demand is about 1000 megawatts, energy is roughly 8000GWh, transmission losses are very good between 2-3%. I cannot say so much for our distribution, which we do in the North, because that is about 14% which is very high. We have about 3500 employees.
You are the main suppliers to Ashanti Goldfields and VALCO. To what extent do you work hand-in-hand with them for investment projects and what kind of new projects do you have in mind?
VALCO is not doing any joint investment with us because it is not in their contract. Ashanti is also not doing investment with us. If Ashanti wants a new substation or an extension to our facility we do it for them accordingly. In the area of projects we are undertaking the Takoradi expansion project with CMS. T2 is now being done on equity and later on we will look for additional funding to refinance the part of the equity so that we will end up with 30% equity and 70% debt. The other new project is what we are discussing today with Marathon Power Company. That is a 300MW plant that will be sited near Tema. We are in the process of discussing power purchase agreement and other agreements in the security package.
The government is looking into alternative electricity providers like solar, wind and gas. To what extent do you see these providers as competitors?
he gas pipeline is going to be to the good of anybody who wants to supply power because it brings down the power cost. With wind, I am not sure if we are going to be able to produce power in such quantities that can be of competition to us. We are however interested and we want to encourage alternative sources of power generation and we are not afraid of competition because we think that will bring down the cost of power and it will also encourage efficiency.
Now you do not have major competitors in Ghana. Do you compete on international basis since you supply to neighboring countries?
I think so. One case in point is when the Benin and Togo came to us and said even though they promised signing a contract with us to supply 500GWh for the next 10 years they said that in 1997 we had a supply problem and so cut their allocation to 350GWh. We tried to argue against their decision but they did not relent. They went to Cote d’Ivoire for the balance so in a way that is a little bit of competition, but Ghana is in the middle and you cannot ignore her.
What are you doing to help implement the Vision 2020 plan?
We are building more power stations to ensure that come 2020 we will be more than prepared to have adequate generation to supply the energy requirement and have some surplus. Takoradi is 660MW, the Marathon Plant will be 300MW and that is a lot. We will be building more power stations to meet the energy requirements. It will be wrong to give the impression to the world that Ghana has a deficiency in power supply again. We have heard the last of it. With the good rains this year and Takoradi running now I do not think there will be any deficiency in power supply again. That is my biggest aim, to make power supply affordable and reliable. We will never resort to load shedding again.
You mentioned joint ventures with the Volta Lake transport company, the Kpong farms and the Volta hotel. Are there any other partnerships or joint ventures you are planning maybe with international companies as well?
We are only sponsors of the Volta Lake Transport Company, which is owned by the Government. Volta Hotel is solely owned by us, and so is Kpong Farms. We have the Volta Telecom Company. It is a telecommunications company that we are nurturing and we want to build the infrastructure to an extent that we can get a good share value when we float shares, but that will come in the future and we will do so with international companies. International companies are also interested in the National Grid. Our Department which does distribution in the North will eventually be taken off VRA and given away to the private sector.
Can you give us some names of the international companies that you have had talks with?
They are Marathon and CMS. That takes us to the year 2003. We are also preparing to sign a memorandum of understanding with Root and Brown for the development of the Bui Hydro-electric Project. We are also talking to a lot of financial houses because we have to find money to reclaim some of the shares in T2, which is about $100 million for which we have put in $10million. We are talking to Ghana International Bank in London, Equator and a few other financial houses.
What would you say has been your biggest achievement since you have been the Chief Executive of VRA?
A couple of things. I think power supply has been stabilized. I have also been able to arrange for off-shore equity for the construction of the 220MW of additional power in Takoradi. The equity came from an American company, CMS.
As you know Forbes magazine targets more than 4 million readers, mostly businessmen. What is your final message to them?
Power is reliable, reasonably priced, and anybody who wants to invest in Ghana can take power supply for granted. I would like to extend an invitation to all of them to come and help us build Ghana.
|
© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Ghana published in Forbes
December 13th 1999 Issue.
Developed by AgenciaE.Tv |
|
|
|
| | | | | |
|
GHANA
