Real estate developers are having to absorb costs associated with the load shedding exercise in Ghana, according to industry experts.

The added costs, which were not forecasted by many is proving somewhat overwhelming for these developers.

Kwesi Anderson of Whitewall Properties said most real estate developers were faced with this dilemma due to the rising need to purchase fuel for generators to ensure productivity is at its maximum.

Unlike other industries that push their costs to final consumers, real estate developers, especially those in the mid-to-high end range, usually absorb this related cost due to their pre-purchase agreements with clients.

With the load shedding exercise in place, it has forced sub-contractors of real estate companies to levy higher than expected charges, costs that real estate companies are forced to absorb. Reports of an imminent shortage of cement may burden the sector further, according to Mr Anderson.

“Sub-contractors [of real estate companies] rely on electricity to produce materials needed to finish building projects. Due to the load shedding exercise, they incur higher costs with the use of electricity generators and pass down this cost onto us. Unfortunately, we end up absorbing the costs due to the pre-purchase agreements that we have with clients,” he said

“If the load shedding exercise is going to drive cement prices up, invariably it means increased costs to us.”

Mr Anderson also added that some real estate companies incur further costs from the purchase of fuel for power generators. He said that although many companies factor this cost into their service charge, it would not suffice in present conditions.

However, the marketing manager of White Wall Properties said that his company, as part of an agreement with tenants, purchased fuel with the cost passed onto them.

“We are forced to buy fuel to power our generators for tenants’ use and this costs us between GH$2000 and GH$4000 at least every two days. The unfortunate part is that tenants are made to pay between GH$800 and GH$1000 each as contribution towards this,” he said.

According to the Ministry of Energy, Ghana has an installed power capacity of 1960 megawatts with a demand of about 1400 megawatts. This demand is said to be growing at an annual rate of 10%.

The growing demand, coupled with intermittent interruptions in supply has led to pressure on the nation’s electricity grid.

Global technology leader, General Electric, is to invest over a billion US Dollars in a bid to add 1000 megawatts of power to Ghana’s electricity generation capacity within a period of seven years.