The plant, which represent 15% of Ghana’s installed power production capacity, will have its output boosted from 220 MW to around 330 MW without requiring additional fuel.
The Takoradi 2 plant is owned by Takoradi International Company, a joint venture that is owned by TAQA (90%) and Volta River Authority (VRA) – Ghana’s principle electricity supplier. When completed, the additional energy will be sold through an existing off-take agreement with VRA, under a revised 25-year power purchase agreement.
Speaking on the deal, Frank Perez, TAQA’s head of power and water, said, “We are delighted to have jointly developed this landmark project with our partner VRA and the Government of Ghana. This is the culmination of hard work by all parties to ensure that we deliver the best possible deal for the Ghanaian consumer in an environmentally responsible way. We have played a vital role during the last ten years in delivering a reliable source of electricity to the population with an excellent safety record, and this project will enable us to continue to do so for another 25 years.”
Project financing for the deal is being provided by World Bank Group member International Finance Corporation (IFC), together with a consortium of international development finance institutions. These include the African Development Bank and Agence Francaise de Developpement.
Work is set to start on the expansion in late July, with commissioning scheduled for some time in 2015. Japan’s Mitusi & Co and Korea’s KEPCO were previously awarded the $260 million EPC contract for the project in 2011.
VRA CEO Kweku Awotwi said, “We welcome the conclusion of negotiations for this important infrastructure project for VRA and the people of Ghana and look forward to continue working in partnership with TAQA. The expansion is expected to save Ghana $30 million per year in fuel costs and will help ensure that the power generation capacity develops at a pace to meet Ghana’s sustainable growth ambitions.”