The cost of development and construction of the project will be born 100 percent by equity invested and debt raised by Early Power.
Accra, Ghana – The Early Power consortium today announced that it has received parliamentary approval from the Government of Ghana and subsequently signed a 20-year power purchase agreement (PPA), which includes a 5-year extension option, with the Electricity Corporation of Ghana (ECG) for the 400 megawatt (MW) greenfield Bridge Power project.
The Early Power consortium is comprised of Endeavor Energy, a leading Africa-focused independent power development and generation company, Sage, a leading independent trading firm in Ghana and the world’s premier digital industrial company General Electric through its GE Power division.
Early Power expects to reach financial close on Bridge Power in December 2016. It will develop the project in two phases – 194 MW in Phase 1 and 206 MW in Phase 2 in the coastal city of Tema, the biggest port in Ghana, 26 kilometers east of Accra. Bridge Power is expected to start producing 144 MW of first power within the first six months to help the country meet near-term power shortages.
“Bridge Power is a first of its kind in Ghana. We’ve customized the project to provide quick and reliable energy production for Ghanaians in order to assist Ghana’s economic growth and create jobs,” said Endeavor CEO Sean Long. “Our understanding of Ghana’s long-term vision for its power sector is built on having reliable and diversified energy. Bridge Power checks all those boxes.”
The project, which is being built in the most economically active part of the country so that transmission losses to most residential and industrial customers will be very low, will have significant economic benefits. While Ghana’s economy has grown by an average rate of 7 percent annually over the past 16 years, the provision of additional, reliable power will further bolster the country’s economic success. Ghana is estimated to need at least an additional 2,000 MW of power generation over the next five years. Bridge Power will not only provide more than 12 percent of the country’s planned power generating capacity by 2020, it will also enable the growth of industrial sectors, light manufacturing and agro-based processing.
Bridge Power is the first Ghanaian project to use a Put Call Option Agreement (PCOA). It allows the Ghanaian government to purchase the plant and associated infrastructure in the unlikely event of an early termination, which means any payment under the PCOA will result in the government and by extension, the Ghanaian people, getting a valuable asset in return.
Endeavor will provide the majority of the equity investment required to accelerate the project. It was also manage construction, and then operate and maintain the plant while Sage will be responsible for the fuel supply for the project. Sage created the gas-to-power fuel solution for the project, using LPG as the primary feedstock for the power plant. Bridge Power is the first such plant in Africa and when completed it will be the largest liquefied petroleum gas (LPG) fired power plant in the world. In addition to LPG, which is cleaner and cheaper than light crude oil, Bridge Power will be capable of being fueled by natural gas and diesel. This aspect ensures the project can provide reliable, base load generating capacity and inject some much needed diversification into the Ghanaian generation mix as it will not be vulnerable to the vagaries of rainfall and water levels at the nation’s dams or any issues with gas supply.
“From our perspective as a company involved in the Ghanaian energy sector, this is the first IPP project we have been involved in as a peer-partner with significant Ghanaian content, and there is great value in working alongside and pitching in our expertise with international companies with the experience and expertise of GE and Endeavor Energy,” noted Emmanuel Egyei-Mensah, CEO of Sage. “Being the first LPG-fired plant in Africa, it is a pioneering example of using clean fuel for power generation in Africa as an alternative to natural gas.”
Across the two phases of the project, GE, the third member of the consortium, will provide 400 MW of power generating capacity through nine GE gas turbines and two purpose built GE steam turbines in two separate combined cycle gas turbine (CCGT) configurations. In combined cycle plants, the waste heat from the first turbines can be used to power other turbines, thereby generating more electricity and making the whole project more efficient. Also, each of the nine gas turbines can operate independently, allowing ECG to more efficiently match supply to actual demand.
Additionally, GE will provide an ‘on balance sheet’ financing solution for the capital required for an acceleration of the first phase of the project as well as a long-term service agreement for the life of the project to ensure reliability and power plant availability of world-class standards.
GE Ghana CEO, Leslie Nelson commented, “Bridge Power for GE is much more than just another power plant. This project represents the first integrated gas-to-power project we will successfully deploy on the continent. Our goal was to successfully create and implement a gas-to-power project that included a full gas solution and financing package and then deploy this model to other countries that are not endowed with cost-efficient fuel sources.”
He added, “We at GE are very proud of the multiple technical, commercial and financial innovative solutions developed by GE, Sage and Endeavor Energy alongside ECG for this project.”