The Africa Finance Corporation (AFC) and Cenpower Generation Company Limited, a local independent power producer have joined forces to develop an independent power plant that will produce 340 megawatts of power, by the close of next year. This will immediately increase the national generation capacity from the current 2,000 megawatts and position the national vision of 5,000 megawatts by 2015 in reach. The combined cycle gas turbine power plant by name - Kpone Independent Power Project, will be the largest privately owned power plant facility in Ghana. It is located in Tema, adjacent to the West African Gas Pipeline landing point and located some 600 meters from the Atlantic Ocean, enabling the use of sea water for direct cooling. The plant will make use of gas from West African gas pipeline, which has began flowing as well as from the Jubilee field, once pumping begins. The US$450 million project is being financed by 30 percent equity and 70 percent debt. The agreement signed on Monday between AFC, Cenpower and a special project development company called Infraco had AFC acquiring 46 percent stake, Cenpower 30 percent stake and the rest acquired by Infraco and other smaller stake strategic partners. AFC is also the debt finance arranger, which will be provided by a consortium of private sector local and international commercial banks, development finance institutions, institutional and export credit agencies. The project falls in line with the Least-Cost Power Generation Expansion Plan for Ghana. Part of its objectives is to promote increased use of indigenous resources for electricity supply, and private sector investment in the development of new production capacity. As a pan African finance institution owned by governments and private Africans, AFC sees the landmark investment as a forward match on its mission to developing bankable power projects in order to address Africa’s critical infrastructural gap. “We decided to be part of this project because as per the mission set for AFC, we saw that the project would help ease the power deficit in Ghana, reduce the cost of electricity from self generation, both to individuals and industrial consumers alike, and more broadly to assist and support the Government of Ghana realize its vision to accelerate economic development. “As a pan-African financing institution, with a focus on financing infrastructure, industry and financial assets in the continent, AFC is committed to helping Africa bridge the power infrastructure gap and address the commercial imperative necessary for the development of its industrial and infrastructural assets, to drive economic growth,” Andrew Alli, CEO of AFC said at the signing ceremony. He was excited about their engagement in Ghana so far, as the Kpone Independent Power Project becomes AFC’s third. AFC previously was the lead investor in the US$240 million African led submarine Main-One Fibre Optic Cable System, which will provide much needed telecommunications capacity in West Africa with a scheduled landing in Ghana in April, 2010. AFC is also the main African participant in the seven-year US$750 million syndicated reserved base lending facility, to develop the landmark Jubilee Oil Field, which at the moment is West Africa’s largest offshore deepwater find in over a decade. Chairman of Cenpower, Mr. Samuel N. Brew-Butler was glad AFC came on board, stating: “AFC is just like the World Bank and its private sector arm the IFC. But this is Africa led.” “The power plant will make a significant improvement in power generation in Ghana when it comes on line. We are enthused to work alongside our dedicated partners in furthering this initiative. What Cenpower hopes to achieve is to be the cheapest sources of electricity in the whole country,” he said. In his comment, Mr. Keith Palmer, Chairman of Infraco noted that the agreement is an important contribution to accelerating urgently needed power supply in Ghana, adding: “we we are pleased it will provide competitively priced electricity for the lowest income consumers in the country.” Director of Power of the Ministry of Energy, Mr. Gabriel Quain who represented the Minister of Energy said the project is a major milestone on Ghana’s journey to power sufficiency and affordability. “The power reforms recognize the importance of the private sector in achieving the national vision. Part of the vision is to produce in excess so that the nation can become a comfortable exporter to other West African countries,” he added. Story by Moses Mozart/B&FT/Ghana