Power Plant For VALCO
The Volta Aluminium Company (VALCO) Limited is to set up a 1,200 megawatts power plant at Tema as part of the government's grand design to establish an integrated aluminium industry in the country.
Constructional works of the first phase of the project, involving a 600 megawatts plant, begin in October, this year and are expected to be completed in 24 months.
The Chief Executive of VALCO, Dr Charles Mensa, told the Daily Graphic that VALCO had found strategic partners from China, India, Norway and Brazil to put up the coal-fired plant next to the VALCO plant in Tema.
Dr Mensa explained that when completed, 350 megawatts of the first phase would go to VALCO for full operation, while the rest would be fed into the national grid.
He said although the Ghana government now owned 100 per cent shares in VALCO, funding the plant would be by foreign direct investment from the strategic partners without any government investment.
According to him, the investment of about $1.2 billion in the plant would be treated as equity.
Asked where the plant would source its raw material of coal from, he said VALCO had made contacts with producers in South Africa, Botswana and Mozambique and the prospects looked bright, adding that for the future the company had its eyes on Nigeria.
Dr Mensa said although most of the coal mines had been shut down in Nigeria, the power plant in Ghana would create the demand for coal from Nigeria in future.
He said immediately the first phase was completed, the second phase would begin and would be used to feed the alumina refinery and bauxite mines at Nyinahin and Kyebi. “The rest of the power will be exported to Togo, Benin and Burkina Faso,” he said.
Explaining the importance of the integrated project, he said it would allow Ghana to start the anticipated industrialisation project that President Nkrumah dreamt of but could not get it going before his overthrow in 1966.
Dr Mensa said aluminium smelters and steel plants had always acted as magnets for industrialisation.
“The Kufuor administration realised that the transformation of Ghana's economy can start with VALCO as the engine because when you have an aluminium smelter running in your country, you will attract electricity generators, auto industries, aero industries and shipping industry,” he said.
Dr Mensa said for the VALCO staff, the new VALCO would be the leader of Ghana's industrialisation effort, saying expectation was that the new VALCO would create opportunity for bauxite mining and create job opportunities.
He said the power plant would lead to the expansion of the smelter and offering of opportunity for chemical production by using salt from Ada, caustic soda and lime production by exploring the lime deposit around the banks of the Volta River.
Dr Mensa said VALCO's revival could lead to an economic transformation and expressed the hope that VALCO would offer Ghana the opportunity to start its industrial transformation.
Asked why VALCO was optimistic about the future when the current smelter was closed because of lack of power, Dr Mensa said previously under the Kaiser administration when the water level was 240 feet, VALCO used to receive 215 megawatts to run three potlines and expressed regret that “at a little above the same level today, VALCO is not working and workers have been laid off just because of pure resentment arising out of other considerations other than the progress of the country”.
He made it clear that the decision of the government to purchase VALCO was a pragmatic decision because it was a good buy.
He gave the assurance that Ghanaians would see the purchase of VALCO as an opportunity to transform Ghana's economy from a colonial exporting economy to an industrial nation exporting finished products.
“We should use electricity as a bait to attract the $4.75 million which the investor would pump into VALCO over the next six years,” he said.
Dr Mensa was optimistic that within two years VALCO would have its own power plant.
He said VALCO required power just for the next two years after which it would have some by itself, adding that with many independent power producers now, Ghana would soon have surplus power to export.
Dr Mensa indicated that in the event of VALCO deciding to re-open its plant, the move would not pose a threat to the Volta Dam because “Burkina Faso has warned Ghana about incoming floods and that will increase water level in the Akosombo Dam”.
He said VALCO had agreed with the government to shut down its plant if the water level should drop to 240 feet.
Expatiating on the decision to purchase VALCO, he said when Kaiser decided to take its lots elsewhere, any reasonable leader would not allow the country to lose such a giant investment.
He said Nkrumah established VALCO to lead the country's rapid industrialisation and economic growth along the path adopted by South Korea but “we lost that vision after the overthrow of Nkrumah”.
Dr Mensa said after 44 years, President J.A Kufuor had decided to revive the smelter and nurture it to recast the whole vision of Nkrumah for rapid industrialisation and economic growth.
This new vision, he said, called for strategic alliances from strategic partners who were sympathetic to developing countries and he found these friendship in leaders in India, Brazil, China and Norway.
“The first evidence of this grand alliance is their decision to support the biggest power plant in Ghana to kick-start the country's industrialisation programme,” he added.
Dr Mensa said in order to set the tone for industrial development, VALCO required 140 megawatts of power to bridge the gap between now and two years when its plant would come on stream, adding that 140 megawatts was equivalent to two-and-a-half feet of water.