Ghana: Gov’t To Provide Total Access To Electricity By 2030
The Republic of Ghana has announced plans to provide universal access to electricity its citizens by 2030.
The West African nation intends to use solar energy to bridge the 15 percent gap in the provision of electricity across the country.
The country’s Minister of Energy, Mr John Peter Amewu, announced this in Accra on Thursday, November 14, 2019, in a speech read on his behalf at a validation workshop on the findings of off-grid solar market assessment in the country.
He indicated that rural and peri-urban Ghana were the targets for the electrification programme.
In a boost to attain that dream, the minister said, Ghana had been selected among 19 African countries in West Africa and the Sahel to benefit from a $265-million facility to increase access to electricity by rural folks.
The project will kick-start simultaneously in beneficiary countries from January 2020.
An assessment of the off-grid solar market was conducted in the beneficiary countries to identify the major supply and demand-side barriers to the establishment of a sustainable market and yesterday’s workshop was to validate the findings of the study in Ghana.
Participants included stakeholders from the public and the private energy sector.
A monitoring and evaluation expert, Mr. Collins Osae, said the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE) had, since 2017, been pursuing an agenda of facilitating the implementation of concrete on-the-ground projects, of which the Regional Off-Grid Electrification Project (ROGEP) was part.
ROGEP covers 15 ECOWAS-member states and four other non-ECOWAS countries, including Cameroon, Chad, the Central African Republic and Mauritania.
Its development objective is to increase electricity access to households and businesses, using modern stand-alone solar systems through a harmonised regional approach.
The financiers of the project are the World Bank, the Clean Technology Fund and the Directorate-General for International Cooperation of the government of The Netherlands, which is providing $265 million for the initiative.
The ECREEE is the technical implementation partner, while the West African Development Bank is the financial implementing partner.
According to promoters of the project, the ECREEE Secretariat, on the basis of the market study, would build the capacity of off-grid (stand-alone) solar businesses and also support an awareness campaign to remove barriers and help create an ecosystem to develop a regional market of solar products.
Ghana: Calls For Taxes To Be Removed On LPG Surprising-Charles Adu-Boahen
A Deputy Minister for Finance in the Akufo-Addo-administration in the Republic of Ghana, Charles Adu-Boahen has described as shocking several calls by members of the association of LPG Marketers in the country.
He said it is surprising to him that the LPG marketers are behaving the way are doing, when the government has actually maintained the price of the domestic commodity.
Vice President of the LPG Marketers Association, Gabriel Kumi, recently, indicated that if the government wanted to achieve its objective of increasing LPG consumption from 25 percent to 50 percent by 2030, then, it had to consider their request of reducing the taxes on the commodity.
“Government has no other option than to take away all the taxes and levies from the product to make it more accessible and more affordable so that the ordinary Ghanaian can use it,” he stated.
But, commenting on the issue during an interview with an Accra-based Citi FM, Mr Charles Adu-Boahen said the government has done well by maintaining the prices through the intervention by the Ministry of Energy.
“This is a big surprise to me,” he said.
According to him, “when we were looking at the ESLA increment, we intentionally left LPG out for this reason because we wanted to encourage more people to use LPG. So the Ministry of Energy recommended that we don’t touch LPG because we are trying to roll out a programme to promote LPG consumption.
“We have all this gas being produced and we need to get consumption to increase because LPG is better than firewood.”
Source:www.energynewsafrica.com
Ghana: Kosmos Energy Elevates Ghana’s Joe Mensah To Senior Vice President Position
US oil and gas production company, Kosmos Energy, has elevated the Manager of its Ghana’s office, Joe Mensah, to Senior Vice President and Head of the Business Unit of the West African country.
Joe Mensah’s elevation comes after serving with distinction as Country Manager since joining the company in 2015.
Per his elevation, Joe Mensah will be responsible for the overall performance of the Ghana business unit, maintaining strong relationships with partners, government and civil society and advancing the company’s social investment programmes, including the activities of the Kosmos Innovation Center.
“Joe has established Kosmos as a leader among international oil companies through understanding local interests and creating a shared agenda that is mutually beneficial to both country and company. I am confident that he will lead the local Ghanaian staff and the supporting team in Dallas into a new era for Kosmos — redefining how the company supports Ghana’s economic and social development,” Andrew G. Inglis, Kosmos Energy’s Chairman and Chief Executive Officer said in a statement.
Mr. Mensah joined Kosmos in 2015, most recently from IBM Ghana where he was the Country General Manager in charge of all aspects of the company’s operations.
During his more than 30 years with IBM, Mr Mensah held a variety of leadership roles in sales and marketing before establishing IBM’s presence in Ghana in 2009.
Benin: Itron To Provide Advanced Metering Infrastructure Network
Béninoise d’Energie Electrique (SBEE), the only energy distributor in Benin, has selected Itron to modernise its electricity distribution system.
Itron will provide the utility with an advanced metering infrastructure network, 40,000 smart meters and energy prepayment management platform.
The AMI will be deployed in the city of Cotonou to help SBEE reduce energy losses and billing errors.
Itron will provide project management, training and support to the utility as well as integrate IPMP as a Software-as-a-Service (SaaS).
AM Afrique, a user of the SaaS jointly with the SBEE, will operate the system and will assure the data exchanges with other internal systems of SBEE (e.g., billing and customer management systems).
SBEE provides energy to more than 600,000 customers and is confident its partnership with Itron will help improve its cash flow.
Customers will be able to pay their bills through a self-service internet portal, Android-based point-of-sale terminals and smartphone applications.
The project is the foundation for the Benin utility to deploy distribution automation applications to strengthen the resilience of its grid in future.
“We have a growing number of customers who utilise prepayment for electricity, and we are excited to implement Itron’s network technology and prepayment solution to equip more customers to take advantage of prepayment in order to improve delivery, efficiency and reliability,” Adjamassouhon Wilfrid, project leader at SBEE said.
“By collaborating with SBEE, Itron will make prepaid electricity accessible to all of the utility’s users, while enabling them to reduce losses and gain greater awareness of its distribution system,” Babacar Diba, area vice president, Africa at Itron.
“By harnessing our software and hardware, SBEE will be able to realise outcomes that help modernise its electricity infrastructure enabling greater end-customer satisfaction.”
Norway Approves Conocophillips’ Tor 2 Development Plan
The Norwegian Ministry of Petroleum and Energy has approved ConocoPhillips’ development plan for the Tor 2 oil field offshore Norway.
The Tor 2 project, located in the North Sea in the Greater Ekofisk Area, is a redevelopment of the Tor field, which was on production from 1978 through 2015. ConocoPhillips submitted its development plan in July.
The project plan envisions a two-by-four slot Subsea Production System (SPS) with eight production wells.
The SPS is planned to be connected to the Ekofisk Complex by multiphase production and lift gas pipelines to existing risers at the Ekofisk 2/4 M wellhead platform. Controls and utilities are provided through a service umbilical from the same existing platform.
The new greenfield facilities will be located approximately one kilometer west of the original Tor platform with no connection to the shut-in facilities.
Seven production wells are planned to be drilled in the Tor formation. In addition, a pilot well is planned to test long-term productivity in the Ekofisk formation. The resource potential for the Tor II project is in the range of 60-70 million barrels of oil equivalent.
“It is great to see that old fields can revive. Tor has already been in business for 37 years. Now a new development plan has been approved and it is ready for a “Tor comeback” in 2020. Through active efforts by the oil companies and technological advances, Tor II will create new jobs and large revenues for the community,” Oil and Energy Minister Kjell-Børge Freiberg said.
The total investment in the development is estimated at NOK 6.1 billion (USD 662,5 million). ConocoPhillips has said that the development concept has robust economics and a cost of supply below $30.
ConocoPhillips operates the project with a 30,66 per cent stake, Total owns 48,2 per cent, Vår Energi 10,82 per cent, Equinor 6,64 per cent, and Petoro 3,69 per cent.
Ivory Coast: Petroleum Ministry Invites Expression Of Interest For 5 Oil Blocks
The West African nation, Côte d’Ivoire, is offering five oil blocks to companies that wants to venture into the country’s oil and gas sector.
The Chief of Staff at the Ministry of Petroleum, Energy and Renewable Energy, Jean Baptiste Aka announced this during the just ended Africa Oil Week in Cape Town, South Africa.
“Today I have the honour on behalf of the Minister of Petroleum, Energy and Renewable Energy to officially release a request for Expressions of Interest (EOI) in five blocks located on the eastern side of the sedimentary basin,” he said.
The three new blocks, CI-800, CI-801 and CI-802, along with existing blocks CI-102 and CI-503, benefit from shallow waters, good geological data and are adjacent to existing discoveries and the proximity of infrastructures.
Although the bulk of the nation’s prospects are in shallow water of less than 200 metres water depth, since 2011, 47 exploration licences have been granted by Côte d’Ivoire including four blocks in water depths exceeding 3000 metres.
The Côte d’Ivoire sedimentary basin is a passive transform margin that lies along the west coast of Africa, from Liberia to Ghana. Oil and gas activities began in the late Fifties with the discovery of bituminious sands in the South eastern coastal basin. By the end of last year almost 70,000km of 2D seismic along with over 92,000km2 of 3D seismic had been acquired with 280 wells drilled.
Several oil and gas deposits have been discovered including Espoir, Baobab, Foxtrot, Marlin, Manta, Mahi. Lion and Panthere, with most of them now in production. This year’s average production is estimated to be around 34,800 bopd for crude oil and 208 mmcf/d for natural gas.
“On the part of the ministry in charge of petroleum and energy side, we want to capitalise on our geographic position and the quality of infrastructures to become the energy hub of the West African subregion.”
Aka continued that: “It is our plan that this position will cover all the value chain of the oil and gas industry from upstream exploration and production to downstream activities including the development of oil and gas infrastructures.
“For the upstream sector, intense exploration activities have been conducted during the past nine years with many exploration licenses being granted, large seismic data acquired, and many exploration wells drilled.”
“Today, in the country there are four producing blocks with an output of around 38,000 bopd of crude oil and 213 MMSCFD of natural gas, mainly consumed locally in power plants and with growing demand,” he added.
Benefitting from a stable regulatory and fiscal regime
Ambroise Niamien, technical advisor for hydrocarbons, at Côte d’Ivoire’s hydrocarbon directorate explained that the process for interested parties is clear and transparent. “We picked those five blocks for obvious reasons and companies are invited to come in, look at the data and express an interest in those blocks,” he said.
“Based on the feedback we get in the terms of proposals that are submitted we will decide the next course of action.
“For now, we are not talking about bidding. Within a couple of months of the conclusion of the expression on interest process we will decide what route to take. It may be to hold some further discussions depending on the interest in any given block. The first stage is to collect the interest of any operator that may be interested in those blocks. Each operator will have one day’s access to the data free of charge and if they want to proceed, they must express their interest. But we want to be flexible. This is a new approach for Côte d’Ivoire, we do not want to tie our hands in a bidding process.”
Source:www.energynewsafrica.com
Ghana: VRA Calls For Competitive Priced Electricity Tariff Regime
Ghana’s hydropower generation company, Volta River Authority, is calling for what it described as a competitive priced electricity tariff regime that incorporates financial compensation for its various ancillary services.
“We are of the considered opinion that the time has come for the mandated institutions to consider and incorporate the provision of ancillary services in the tariff methodology,” Mr. Kweku Andoh Awotwi who is the Board Chairman of VRA said at the Authority’s Annual General Meeting (AGM) on Tuesday.
According to Ghana News Agency, Mr Awotwi explained that the issue of non-cost reflective tariff and inadequate liquidity, continued to affect the Company’s finances, adding, “It is our expectation that the Government will address these critical issues through its ongoing initiatives.”
Mr Awotwi said a key priority of the West African nation hydropower generator, was to collaborate with Government and other interested stakeholders to develop and convert their simple cycle plants into combined cycle operations.
The target plants include the Kpong Thermal Power Station and the Tema Thermal One Power Plant.
It also aims to transfer ownership of the T3 Power Plant to VRA to enable it to re-tool it and operate it in a combined cycle mode with a private sector partner.
Mr Awotwi said generation from their hydro sources increased marginally from 5,034GWh in 2017 to 5,044GWh, contributing 37 per cent to the National power generation.
“Though we could not achieve our thermal plant availability targets, we successfully restored the second unit of the Takoradi Thermal plant (32G2)making available to the system over 100 MW of power which has been unavailable due to prolonged maintenance activity”.
The Authority’s decision to operate on natural gas led to a 30.5 per cent increase in the use of the resource, he said, pointing out that the completion of the Takoradi-Tema Interconnection project would enhance the thermal operations in the Tema enclave.
He said the VRA had a commitment to expand its portfolio of renewable energy projects and was in collaboration with the Ministry of Energy, the Ghana Atomic Energy Commission and the Nuclear Power Institute to support the development of Nuclear power in Ghana.
Chief Executive of the VRA, Ing. Emmanuel Antwi-Darkwa, said the Authority was on the path to financial sustainability and had since 2018 not received financial support from the Ministry of Finance.
“VRA is restructuring into a new era in 2021 and have put plans in place to ensure development in a sustainable manner, sustain our position as a market leader, improve operational and project implementation efficiencies, advance internal and external business processes and build, nurture and develop their human capital,” he said.
On his part, Chief Executive Officer at the State Interest in Governance Authority, (SIGA) Mr Stephen Asamoah-Boateng, commended the VRA, saying, they had provided a very hopeful financial outlook.
“We are looking beyond the PDS/ECG era,” he said, and pledged SIGA’s support to the VRA’s transformational efforts.
African Energy Chamber And OPEC Discuss Technical Cooperation At ADIPEC
A team of the African Energy Chamber led by Executive Chairman NJ Ayuk have met with the Secretary General of the Organization of Petroleum Exporting Countries (OPEC) H.E. Mohammed Sanusi Barkindo in Abu Dhabi at the ongoing Abu Dhabi Petroleum Exhibition & Conference (ADIPEC).
A statement copied to energynewsafrica.com indicated that both parties discussed the sharing of best industry practices and technical cooperation with new and upcoming African oil producers.
Given the increasing number of African producers who have rejoined OPEC, and the strong support of non-OPEC African nations for the Declaration of Cooperation, both parties agreed on the opportunity to strengthen the technical dialogue between OPEC and Africa.
In order to cement OPEC’s engagement with new and upcoming producers, the Chamber will be assisting in the organization of an OPEC Technical Workshop in Dakar in early 2020, which will be open to regional technicians from ministries and national oil companies.
“As OPEC expands, it is important to open its technical meetings and workshops to non-member countries who could potentially join the Organization later,” Nj Ayuk, Executive Chairman at the African Energy Chamber and CEO of the Centurion Law Group said.
H.E. Mohammed Sanusi Barkindo welcomed the initiative as a very timely one, insisting that now is the right time for countries such as Senegal to engage with OPEC and the global oil industry.
“Such technical workshops can establish a framework for the long-term sharing of best industry practices for new African producers. They ultimately benefit the development of transparent and sustainable industries, this is good for Africa and Africans,” he stressed.
Tullow Stock Sinks On Finding High Sulfur Content In Guyana Crude
Shares in Tullow Oil plunged to a two-year low on Wednesday after the London-listed explorer warned that two significant discoveries in waters off Guyana contained heavy oil, prompting warnings that the projects would be difficult to commercialise.
The stock sank as much as 23% on the news that crude from two wells in the South American country was found to be heavy, with a high sulfur content. That’s disappointing to shareholders as the Guyanese discoveries earlier this year had countered concerns over troubled ventures elsewhere.
“We expect investors to worry about the projects’ value,” Al Stanton, an analyst at RBC Europe Ltd., said according to worldoil.com. Heavier oil is harder to produce and requires more energy to extract and transport.
Tullow struck oil twice off Guyana this year in a drilling campaign that’s been closely watched following earlier finds in the area by Exxon Mobil Corp. Tullow’s success there helped to offset concerns over its operations in Africa, where technical difficulties have hampered output in Ghana and projects in Uganda and Kenya have faced delays.
“The commerciality of both discoveries is still being assessed and our options are being reviewed,” Tullow spokesman George Cazenove said Wednesday. “The quality of the reservoir and the significant over-pressure are positive, and while oil of this type is sold in global markets, we need to do more work on the various parameters.”
Tullow also reduced its 2019 oil-output forecast on Wednesday, citing the problems in Ghana. It now expects to pump an average of about 87,000 bpd this year, down from previous guidance of as much as 93,000 bpd.
The stock traded down 22% at 161 pence as of 10:05 a.m. London time, making it the worst performer on the Stoxx Europe 600 Oil & Gas index. Eco Atlantic Oil & Gas Ltd., a partner in one of the Guyanese blocks, tumbled 50%.
“Tullow remains confident of the potential across the multiple prospects” in the country’s Orinduik and Kanuku blocks, the London-based company said in a statement. Results from the next well in the drilling campaign — Carapa — are expected by the end of the year.
The company forecast full-year capital spending at about $540 million, free cash flow at about $350 million and net debt at around $2.8 billion.
Power Africa, Africa50 Deal To Attract Financing In SSA Power Sector
Power Africa and Africa50 have signed a Memorandum of Understanding (MOU) which aims to attract investments in the energy industry in sub-Saharan Africa.
The two will develop innovative public-private partnership models at the country and regional levels throughout the region.
“Energy generation and transmission are among the most pressing infrastructure needs in Africa, with important economic multiplier effects. To successfully develop energy sector projects requires collaboration among all stakeholders, so we are pleased to partner with the Power Africa initiative and look forward to working with its experienced member companies and organisations to implement power projects on the continent,” Koffi Klousseh, Africa50’s project development director said.
Richard Nelson, a deputy coordinator of Power Africa, added: “This new partnership underscores Power Africa’s commitment to partnering with African institutions. We are looking forward to deepening our collaboration with Africa50 to finance new energy and transmission projects in sub-Saharan Africa.”
Power Africa is a US government-led partnership, coordinated by USAID, that brings together the collective resources of over 170 public and private sector partners to double access to electricity in sub-Saharan Africa.
The goal is to add more than 30,000MW of cleaner, more efficient electricity generation capacity and 60 million new home and business connections by 2030.
As of July 2019, 56 of Power Africa’s 124 financially closed projects are producing 3,486MW.
Africa50 is an infrastructure investment platform that contributes to Africa’s growth by developing and investing in bankable projects, catalysing public sector capital, and mobilising private sector funding.
Africa50’s investor base is currently composed of 28 African countries, the African Development Bank, the Central Bank of West African States, and Bank Al-Maghrib, with over $876 million in committed capital.
Originally published on smart–energy.com
Refining Procurement Processes In Ghana’s Energy Sector(Article)
By: Paa Kwasi Anamua Sakyi
The power sector is one of the core sectors in the global economy, supporting countries roadmaps of growth and development. The sector assumes more significance because electricity as a commodity, is an enabler to goods and services that enriches and extends lives. And so for a developing country such as Ghana, the need for a healthy and sustainable power sector is more vital to modernizing agriculture, increasing trade, empowering women, saving lives, improving transportation, expanding industries, and powering communications ― serving as building blocks for escaping poverty and enriching lives.
There has consistently been the need for investments in the power sector through different projects to ensure sustainable power supply to meet the growing demand for electricity. Aside the projects expanding electricity production to stimulate production in all the sectors which use power (forward linkages), it demands intermediate goods like fuel, machinery, and construction services et cetera (backward linkages).
Like for any other sector, procurement for goods and services remain one of the critical functions in the power sector, and across the generation, transmission, and distribution arms. The task of identifying and selecting suitable supplies and service providers becomes more critical as the sector undertakes reforms in response to regulatory uncertainty, unpredictable economy, environmental mandates, investment needs, and paradigm shifts. These forces translate into increased pressure for entities within the power sector to operate strategically, minimize risk, and achieve superior performance as they seek cost savings at all levels.
Hassanzadeh and Jafarian (2010) sees procurement best practices as a strategic function, working to improve organization’s profitability, reduce raw material prices and costs, and identifying better sources of supply. Madhavaram and Hurt (2008) concludes that the higher the degree of procurement best practices, the better it is for cost reductions, improvement in inventory, customer service, new product development, information and material flow, and financial performance.
The Ghanaian Experiences
The potential value of the procurement function must prompt utilities in Ghana’s power sector to move away from traditional methods of sourcing for supplies and service providers, which is often frost with opacity and political interference, of which have been a cause for concern in recent times. Many-a-times the country has resorted to sole sourcing (though allowed under certain conditions) and other obscured methods, as against other transparent procurement models and methods underpinning the selection of a group of contractors who are most suitable to execute a given project. Typical example of questionable procurements within the country’s power sector includes but not limited to independent power producers (IPPs) and power purchase agreements (PPAs), the proposed Mytlineos AMERI Plant take-over, and the recent botched Power Distribution Services (PDS) deal.
The manner in which independent power producers (IPPs) were engaged to shore up Ghana’s installed power capacity during the 2012-2016 power crises, is still under scrutiny. The amount and structure of power purchase agreements (PPAs) signed during this period is still blamed by section of Ghanaians as a contributor to the recent power sector debts. Figures put out by government suggest that the country pays the independent power producers (IPPs) US$500 million per annum for power they generate for the country including those not consumed under a “take-or-pay” (ToP) agreement. According to the Finance Minister, on average less than 40 percent of the contracted take-or-pay capacity is actually used, with the country paying over half a billion U.S. dollars annually for excess power generation capacity, contributing to the challenges in the energy sector, and posing financial risks to the economy as a whole.
The manner in which the Energy Ministry’s sought to engage a third party, Mytilineos International Trading Company to take over the operation of the AMERI power plant in July 2018 would have caused the country over US$1 billion for needless work. The lack of due diligence that characterizes the re-negotiated agreement between the Government of Ghana and the Africa & Middle East Resources Investment Group (AMERI Energy), would have overburden the Ghanaian with a high cost of electricity if the take-over was allowed to pass.
It gets quite frustrating that the country still grapples with procurement challenges, in spite of clear laws set to provide a system for ensuring transparent, efficient and economic public procurement, and to prevent fraud, corruption and other malpractices in public procurement.
Keeping to Rules
Objectivity, transparency and fairness are essential ingredients in procurement procedures, for a well-functioning free-market economy. Bidding as a tested mechanism that allows companies to compete for contracts, is supposed to achieve price reduction, prompt delivery and quality ― key factors factor for “value for money” (VFM) procurement. The bidding process according to Dimitri (2013) literally rewards both the “quality” of the proposal, and the “reasonableness” of quotes, presenting a winning case for both the tendering entity and the public.
Once the conditions of the competitions are set, both the entity issuing the bid and the bidders are required by law to keep to the rules to deliver what is expected to be a fair and transparent ranking approach. Notwithstanding, opportunistic behaviour may attempt to “game the system”, especially in much complexed services which are harder to rank (Soltys, 2014). The potential opposing interests makes it imperative for tendering activity to be guided by certain principles to avoid unfair competition. Apart from the manipulative settings of qualifications or inappropriate methods of evaluating the bids (Žujo and Car-Pušić, 2009), public tenders are on many instances confronted with difficulties such as conditionality imposed in agreement, and the involvement of unqualified candidates (Wittig and Jeng, 2010). These are some of the reasons why procurement agenda remain part of major sources of risk for key sectors of the economy, including the services and construction projects.
In public procurement, most contractors and public officials view the qualifying procedures they are obliged to follow as time consuming and wasteful. Meanwhile, the qualification, together with the evaluation criteria, largely influences the end result of the tender procedure and the success of the project as a whole, i.e. whether the customers gets the best value for their money (Hanák and Muchová, 2015). It is the view of Plantinga et al. (2014), that inappropriate handling of tenders may be the result of deliberate action or just a lack of experience on the part of the responsible personnel.
Hanák and Muchová (2015), argue that the overall success of the project is significantly affected, among other factors, by the technical, economical and professional capability of the contractor who is awarded the tender. For this reason, the tender procedure should pay due attention to the scope of required qualifications. And while the qualification criteria must be set so as to only allow the participation of properly qualified candidates, the criteria must at the same time facilitate the creation of sufficient competition in the tender.
Sticking to Competitive Tendering
Aside the need for an effective public sector procurement system in the power sector to influence both micro and macroeconomic efficiency, it is also necessary to follow procurement procedures that assure objectivity, fairness and transparency in the award of contracts. These are vital ingredients in escaping cause for allegation of corruption in the sector. Sound procurement practices will enhance respect for power sector institutions and government efficiency, while attracting additional foreign investments into the country’s power sector.
Competitive tendering is an approach that has been introduced on numerous markets, including the local bus markets in Europe in response to increasing costs. The adoption of this process has changed the structure and development of the local bus market in Europe, resulting in well documented effects in terms of reduced prices.
Although the Millennium Development Authority (MiDA), embarked upon a competitive procurement process to select Manila Electric Co. (Meralco), a Filipino company and a group of Ghanaian investors to manage, operate and invest in ECG’s operations for 20 years, in the name of PDS as the Concessionaire, it waived a substantial number of the “conditions precedent”, committing them as “conditions subsequent.” The process created room for the PDS consortium to take over the assets of the ECG, failing to carry out adequate “due diligence” to identify risks and implement strategies to protect the assets of Electricity Company of Ghana (ECG) before signing the contract. The end result was a botched PDS-ECG deal, which has brought some form of damage to the country’s power sector.
Even as the government of Ghana (GoG) sought to cancel the PDS Concession deal, it proposed an adoption of a restricted tender process to fast-track some of the processes to replace PDS. This process for the first time was strongly contested by almost every Ghanaian because of the inherent risks. Restrictive tender is known to promote corruption and cronyism, kills transparency, leads to the high cost of services arrangement, does not provide value for money, and does not give wider alternatives to choose the best company to perform.
The creation and maintaining of a sufficiently competitive environment is still the most desirable, because it can be assumed that the prices achieved in the tender will decrease with the increase of the number of bids submitted in the tender. And choosing the right contractor increases the chance of reaching the goals of the project which, first of all, keep the schedule within the estimated costs, time frame and quality.
Written by Paa Kwasi Anamua Sakyi, Institute for Energy Security ©2019
The writer has over 22 years of experience in the technical and management areas of Oil and Gas Management, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media.
Ghana: Gov’t Still Considering Private Sector Player In ECG -Ofori-Atta
The Akufo-Addo administration is still committed to introducing private sector participation in the management of Ghana’s electricity distribution and retail company, Electricity Company of Ghana (ECG).
This, is according to the West African country’s Finance Minister, Mr. Ken Ofori-Atta.
Government last month terminated the concession agreement signed between ECG and Power Distribution Services (PDS) after several weeks of controversy, due to what government described as fundament and material breaches in PDS’s obligations in the provision of payment securities.
The decision compelled US government to withdraw an amount of $190 million which was meant to support the Ghana Power Compact II.
However, delivering the 2020 budget statement in Parliament on Wednesday, November 13, 2019, Mr. Ken Ofori-Atta said regardless of the developments in the sector, “Government is fully committed to [ensuring] private sector participation in ECG and is focused on moving forward with urgency to find a suitable replacement for the PDS arrangements.”
“Moreover, we are prepared to review the transaction structure and indeed, recognize the need to improve significantly the management of ECG, by bringing in world-class private sector expertise and attracting adequate private capital,” he added.
He further indicated that a competitive tendering process will be initiated very soon to find a replacement for PDS.
“Against this backdrop, Mr. Speaker, I am pleased to announce that Government intends to initiate an accelerated tender process to select a new private partner for ECG in the coming months. It is indeed Government’s intention to make relevant adjustments to enhance the existing bid documents and tailor the process to optimize the selection from companies having a track record of managing and operating a comparable utility, so as to achieve a fair, transparent and expeditious closure of the transaction”.
The Minister also added that concerning finding a new replacement for PDS, due diligence will be done to ensure that certain mistakes are not repeated.
“Mr. Speaker, we cannot overstate the importance of learning from past mistakes if we are to make sound decisions going forward. However, we have no doubt that a well-executed partnership between ECG and the “right” technical and financial partners, will certainly improve our distribution capabilities and enhance end-user experiences”.
“In this regard, heightened scrutiny will be brought to bear in the design and implementation of the financial and technical evaluation criteria to ensure that interested bidders not only have credibility and extensive experience in operating and managing a comparable electricity utility but also possess the financial wherewithal to make the requisite investments in ECG to achieve significant reductions in technical and commercial losses, as well as drive operational efficiency to deliver sustained service reliability for the benefit of all Ghanaians”
Ofori-Atta also maintained that despite the challenges encountered in the PDS concession agreement, Ghana remains committed to its relationship with the Millennium Challenge Corporation (MCC).
“Indeed, Government fully respects and is committed to the essential principles underlying the relationship between the MCC and the Government of Ghana, as well as the overall bilateral relationship between Ghana and the United States”
“Moreover, Government remains committed to the energy sector reforms, as envisioned under both the MCC Compact and the Energy Sector Recovery Program (ESRP), developed with the support of the World Bank”.
Source:www.energynewsafrica.com
Ghana: BOST Targets Western Region To Boost Market Share
Ghana’s strategic oil company, Bulk Oil Storage and Transportation Company Limited (BOST), has initiated strategic steps to expand its market share to make the company more efficient, and one of such moves is a proposed establishment of a depot at Takoradi to serve that enclave.
The West African nation’s strategic oil company has depots at Accra Plains, Kumasi, Buipe, Bolgatanga, Akosombo and Mami Water with total capacity of 425,600m3.
As part of BOST’s expansion drive, it has acquired a 185-acre land at Pumpini near Takoradi in the Western Region for the establishment of storage infrastructure.
“The Western Region storage facility will have spaces for 90,000 m3 gasoline, 60,000 m3 gasoil and 20,000mt LPG. The actual construction of the proposed facility is expected to commence in 2020. The completion of the facility will give the company enough visibility to serve the market and compete favourably in that part of the country,” Edwin A. Provencal, Managing Director of BOST, said in a story published by Business & Financial Times(B&FT).
He noted that actualization of the Western Region depot, coupled with other strategic plans such as enhancement of products’ transportation will help BOST capture about 50% of the market share in the medium term. Currently, BOST controls about 23% of the market; even though it has 35% storage capacity of national stock.
According to B&FT, Mr. Provencal who was speaking at a sensitization workshop for members of the Institute of Financial and Economic Journalists (IFEJ) held at Dodowa in the Greater Accra Region, said the move form part of efforts to turn the company around in order to make it a profitable enterprise in the petroleum supply chain.
He also stated that the company plans to rollout many infrastructure expansion to ensure operational efficiency, especially inter-depot connecting pipelines, such as a proposed pipeline between Akosombo and Kumasi. This, he said, will reduce the quantum of products transportation by Bulk Road Vehicles (BRVs) also known as road tankers.
“BRVs transportation is highly risky and also puts excessive pressure on the road.”
The BOST MD continued that the company was working assiduously to activate export trade with landlocked countries including Burkina Faso, Mali and Niger to generate more revenue.
“We have had levels of discussions with our business partners to supply them petroleum products through the Bolgatanga depot. There’s going to be construction of a 200km pipeline from Bolgatanga to Bingo in Burkina Faso to facilitate the export business”, he said.
Mr. Provencal however stated that for the above-mentioned strategies to come to fruition, much will depend on how quick BOST can raise substantial money to execute those projects, indicating that the company requires about US$150 million, of which US$64 million will be used to improve infrastructure such as storage facilities and pipelines.
Nigeria: NNPC Seals $2.5bn Gas Supply Deal With NLNG
The Nigerian National Petroleum Corporation (NNPC) has challenged shareholders of the Nigeria Liquefied Natural Gas (NLNG) to work very quickly towards expanding the production capacity of the company beyond Train 7 to take advantage of developments in the global LNG market.
The Group Managing Director of NNPC, Mallam Mele Kyari, gave the charge in Abuja, during the signing ceremony of a $2.5bn pre-payment agreement between NNPC and NLNG for Upstream gas development projects to supply gas to NLNG Trains 1 – 6.
Speaking on the significance of the agreement, the GMD said it would help to resolve the issues around gas supply to Trains 1 – 6, stressing that there was need to fast-track action on the process of bringing more trains on stream.
“Here at NNPC, we are thinking beyond Train 7; if your ambition is Train 7”, Kyari challenged the shareholders.
He noted that though NLNG has been a huge success as a company, it must go beyond its current achievements and initiate other viable projects capable of generating better return on investment.
“Actually, our thinking should be on what else we can do or what other projects we can work on as quickly as possible to take advantage of the enormous potential in-country. There is also the need for us to take advantage of what is happening in the global market and do things very differently. There are opportunities there and our company must move into those locations and we must move fast,” he declared.
The NNPC helmsman said the pre-payment gas supply agreement was a milestone which aligned with the Federal Government’s aspirations of monetizing the nation’s enormous gas resources, protecting the Federation’s investment in the NLNG, ensuring full capacity utilization (22mtpa LNG and 5mtpa NGLs) of Trains 1-6 plants, generating employment, and providing new vistas of growth opportunities in the nation’s LNG sector.
Earlier in his address, the Managing Director of NLNG, Engr. Tony Attah, noted that the signing of the gas supply pre-payment agreement was a significant step towards ensuring the company’s business sustainability and competitiveness.
He called for support to ensure that the Final Investment Decision on the Train 7 Project is taken this year without fail, adding that the project was no longer an ambitious one in the light of developments in the global LNG market.
Highpoint of the occasion was the signing of the gas supply pre-payment agreement which was witnessed by the Country Chairman of Shell Companies in Nigeria, Mr. Osagie Okunbor, and representatives of Total, Eni/NAOC, amongst others.