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electricity is always at the heart of economic transformation |
OVERVIEW
In
1961-1965, a landmark dam, the Akosombo dam was constructed. The Akosombo
hydroelectric project was a brainchild of Dr. Kwame Nkrumah, and it served
about six million Ghanaians then. One would have thought this development was a
precursor of greater achievements for erstwhile Gold Coast. Rather
unfortunately, today, the Akosombo dam and electrical energy in general have become
a headache for the nation. ‘’Dumsor dumsor’’ it is.
It
is estimated Ghana currently has a power deficit of 550MW (megawatts) including
200MW for reserve. It is pathetic instead of stakeholders working fervently to
ensure energy security in the nation, all the glamour is about political talks.
It will be a grave injustice to blame a particular political leader/party for
the dumsor mess we find ourselves in. Each and every head of state who once
served after Dr. Nkrumah’s regime should be congratulated for our energy
crisis- well at least that is what they expect us to do.
It
cannot take a single blog post to consume up our entire energy sector but this
post may just prove otherwise.
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Akosombo dam has been the pulse of Ghana's electrical energy |
THE CHALLENGES
It
is becoming evident no crisis in my country can be divorced from poor
leadership. Absolute lack of foresight is the virus for our current predicament
in the energy sector. Imagine if all the eleven heads of states who served
after Dr. Nkrumah at a point in time had decided to construct another 1038MW
dam or better still look to other avenues of power. Even though ex-president
J.A Kuffour did attempt a power to add up to the power generating capacity
through the construction of the Bui dam, this project was just another
political gimmick and it may take forever for the Bui dam to be fully
operational. In addition, financial incapacity has cost us a lot in the power
sector. We lack the financial muscles to improve on our power generation and
this is by no fault of Nature’s. We have failed miserably at generating income
from our power sector. Just about two weeks ago, we have been made aware of
GHC500m debt owed the Electricity Company of Ghana (ECG). Last year at the
public accounts committee, revelations on ECG’s annual turnover in 2013 was at
best comical. One may be tempted to think inadequate indigenous scientific
knowledge may be one of the challenges battling our energy sector. For
instance, a friend quizzed me on why our professors could not lead a team of
students to work on a power plant. Then again, you go back to my two previous
points; poor leadership and lack of funds. Stories of low water levels on
annual bases in the Akosombo dam may as well legitimise this claim of
inadequate scientific capacity, but l do not agree. Test the Ghanaian professor
and his students through the provision of all apparatus, and you see the
results for yourself.
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leadership wahala, the vision of Osagyefo still missen |
ABOUNDING HOME PROSPECTS
Even
in all the management blues, Ghana still maintains a great potential to be an
energy power house in Africa. The resources for all forms of electrical power
generation are everlasting in the nation. The tidal waves, lakes, rivers, sun,
biomass, winds, and thermal prospects are all encouraging. Luckily for us,
there are text book approaches on the utilisation of all these available
natural resources in the form of electrical energy. More intriguing is that all
the potential power sources are limitless and unquantifiable. In addition, the
controversial nuclear plant is also an avenue for power generation. Let us
leave the politics out of the discourse surrounding the building of a nuclear
plant in the country and allow science to take charge. Nothing could be
impossible, more so when the blueprint is in other countries. The uranium
deposits could finish in the next future but l believe can go beyond the realms
of uranium. Why can we not pioneer with a new form of atomic electrical power
generation even if it will take us the discovery of ‘’ghananium’’ to do so?
Electrical energy potentials are all over the nation and that which is needed
is the ever elusive harnessing.
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tidal waves at Ada beach; a potential of power hub |
THE SHORT TERM MAGIC BULLET
The
crises are confronting our power sector, and all we should focus now on is
finding a solution or risk dumsor make energy sector powerless. I have
monitored His Excellency attempt to solve the problem in the interim, most
recent of which took him on the plane to Berlin, and the formation of a power
ministry. I do not see any hindrance to the Ministry of Energy that it could
not roll out measures to arrest the menace of dumsor, and l do not believe it
takes an establishment of a new ministry to provide energy security for a
nation either. Well, young Barack Obama told our parliament and the nation at
large in his address-way back in 2009 when he paid a visit-to pay important
attention to make investments in the power sector. It therefore amazes me that
the ‘’yevoo’’ opened our eyes, we chose to close our eyes and fly blindly to
the white to bail our power sector out.
I
have thought of a short term plan to generate 800MW of power in a matter of six
months. 800MW is more than enough to end dumsor and also provides a surplus of
250MW, which could be sold out. My break down includes; 160MW solar project to
be situated in the North, 480MW biomass project to be situated in the South,
and 160MW wind energy project to be situated at the Central portion of the
nation.
I
am aware of the fact that in economic terms, one would suggest we focus on
just biomass because it is the cheapest
form among the three forms l have enlisted above, but l think the other two forms-
solar and wind- are vital in the future and paying attention to them now is a
watershed investment. In scientific tools, management, capacity building, etc,
an investment in wind and solar now shall pay us back in the shortest possible
future. Also, it is only expensive to install solar cells, afterwards it is all
about reaping the fruits.
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concentrating solar power in Spain, a blueprint |
FUNDING
A
480MW biomass project will cost us $125m, a 160MW solar project will cost
$460m, and a 160MW wind project will cost $240m. All these dollars sum up to
795m. It is an open secret the Volta River Authority lacks the financial
strength to carry out such a project.
In
somewhat a deviating sentence, l would like to express my displeasure at
efforts give up huge stakes in our energy sector to the private sector to
private firms; these private firms have nothing to offer Ghanaians, all these
private firms seek is the maximisation of profit. We cannot keep burdening the
Ghanaian with unreasonable tariffs due to investments by private firms.
In
my capital tree to raise $795m, l have uncovered an indigenous way to come up
with the funds;
Ø $267.5m syndicate loan
from banks operating in the country at the rate of accumulated 130% in period
30 months.
Ø $100m investment from the
VRA/Government of Ghana.
Ø $70m investment from
Ghanaians in the diaspora under the supervision of Ghana’s embassies with
mandate from Bank of Ghana by the sales of treasuries at 100% with a maturation
period of 30 months
Ø $357.5m investment from
Ghanaians at home through the sales of treasuries at 100% with a maturation
period of 30 months;
1. An investment of $100,000
each from 500 citizens
2. An investment of $50,000
each from 1000 citizens
3. An investment of $20,000
each from 4000 citizens
4. An investment of $10,000
each from 5000 citizens
5. An investment of $5,000 each
from 15000 citizens
6. An investment of $1,000
each from 30000 citizens
7. An investment of $500 each
from 30000 citizens
8. An investment of $100 each
from 40000 citizens
9. An investment of $50 each
from 70000 citizens
Due
to the poor revenue generated by the VRA and ECG over the years, investors may
be reluctant to trust their investments in the hands of VRA. Nonetheless, if
proper logistics are put in place, investments shall flow in. It is obvious
that the energy industry particularly in Africa is lucrative venture. It just
takes a little bit of awareness creation to get indigenous Ghanaians to invest
in the power sector of their nation-everyone wants to say goodbye to dumsor.
The heavy profit margins- though they may look ridiculous at first sight- is a
ruse aimed at encouraging investing at a fast pace. Besides, 800MW of
electrical power at the current tariff rate rakes in well over GHC9.5bn in 30
months, so there is enough to give out.
I do not want to bore you with the
breakdown of the finances (you may forward any concerns over the finances to me
at kizito8@gmail.com and l shall address all
those l can). At the end of the investment cycle, the VRA should have well over
GHC4bn to invest independently in other electric projects.
THE BIGGER PICTURE
Africa
in general has her fair share of the power crisis. It is good news for any
investor who is keen on investing in the energy sector of Africa. Power
generation and distribution in Ghana should never be limited to the borders of
Ghana alone. The West Africa power crisis is a scholarship for our power sector
to build and underline its pedigree.
‘’ECG’’ can tap into this market by
building under water cable through the gulfs. Mozambique, Gambia, Ethiopia,
Sudan and Congo would not prevent Ghana from providing them with reliable power
through the harnessing of their hydroelectric potentials. Furthermore, the
principles of solar, thermal, wind etc holds elsewhere on the continent. It has
been estimated Africa needs to invest $480bn to put an end to the erratic power
supply system on the continent, and if you invest $480bn in electricity over period
of three decades, you make hundred$ of trillion$.
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VRA, still an awful lot of work to be done |
To carry out the vision of this post, we must not rely on
only Volta River Authority. Talks of nuclear, solar, and biomass means other
forces must come to the fore. Parliament, it is now your turn.