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09.01.2002 Feature Article

VRA 1961-2001: 40 Years of Powering Development

By Press
VRA 1961-2001: 40 Years of Powering Development
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Accra Mail The development of the Akosombo dam was very much dependent on the aluminium smelter. The negotiations on that aspect of the project were as involving and complex as the dam's. Without the smelter there would have been no "Akosombo Kanea" for the dam could only be economical if there was a ready market for the power that would be generated from it. Bauxite deposits had been discovered in the Gold Coast as far back as the beginning of the century and it was thought those deposits could be mined to feed a smelter, which would utilise the power in its smelting process. Indeed in addition to the Nyinahin deposits, the discoveries near Kyebi "were found to be much more extensive than had been suspected; indeed it was estimated that there was sufficient bauxite at Kibi to keep even the largest smelter envisaged busy for at least fifty years." It fell on Edgar Kaiser, whose family owned major construction and industrial companies in the US to put together the necessary financial and technical package to get the smelter ongoing. A personal rapport between him and Nkrumah helped things along famously. It was his "Kaiser Reassessment Report" which in a sense set the final seal for work to commence. His report recommended three vital decisions, which unified the entire project into one whole integrated activity. 1) Akosombo would be the dam site. 2) The smelter would be sited at Tema 3) Aluminium powder would be imported for 10 years, thus putting the development of Ghana's own deposits on hold. Edgar Kaiser indefatigably worked to interest US and Canadian firms in the smelter. "He was able to summon a meeting in New York on November 4th at which he formally reported to the Ghanaian Ambassador the formation of a company to be known as the Volta Aluminium Company (Valco for short). Its purpose was to work out with the Ghanaian Government the development of an aluminium smelter in Ghana. Represented at the meeting were five major aluminium interests (including Kaiser, Reynolds and Alcan), all in an exploratory and uncommitted capacity but all of them basically sympathetic to Ghana's aims and objects in spite of the temporary lull in the aluminium market." By December 1961, the required financing had been secured and Ghana now virtually had a hydro-electric dam, an aluminium smelter, and a harbour in sight. The preparations that led to these momentous achievements when Ghana was only 4 years old were "a considerable act of faith on the part of Kwame Nkrumah supported by Edgar Kaiser." An Italian construction group, Impregilo was awarded the construction contract, and with the first Chief Executive of VRA, a Canadian engineer called Frank J. Dobson in place, the physical activity to create "Man's Greatest Lake" took off at a furious pace. This is how a photographer hired to do a compilation of the construction described work at the dam site: "The whirr of machines, the shuffling, stamping feet of plastic-helmeted human beings and the constant thunderous dynamite explosions, all conspired to make one long ear-splitting din that drove away crocodiles, monkeys, rodents and reptiles in an unprecedented stampede. Akosombo bristled and vibrated with intense engineering activity." With these travelogue-sounding beginnings, Ghana's biggest civil and electrical engineering project blasted off. The Italians set their eyes on September 1, 1965 when electricity from at least one generator would start flowing. For this to be possible, waters of the lake had to build up to an appreciable level by July 1964. After a great deal of back-breaking work, disappointments and near disasters, "on May 19, 1964, in a small ceremony on the east bank of the river, President Nkrumah lowered the solid steel and concrete gates that finally blocked the tunnel. At once, there started to form - it rose 3 feet the first day - a new feature for the atlases of the world: the 250-mile long Lake Volta, soon to become the largest man-made lake in the world." IV AFTER
A cliché would be in order here. Since then a lot of water has passed under the bridge, or appropriately, through the sluice gates. VRA and the Akosombo Dam have come a long way. Much has since been added to the Akosombo dream. Another dam at Kpong was added in the seventies, a Volta Lake Transport service has been in operation since the eighties, Akosombo power extended to the Northern Regions in the nineties, and in order to diversify, a thermal generating plant came on stream at Aboadze, near Takoradi, at the beginning of the millennium. The VRA and its dams are now at the mercy of one natural problem and one man-made problem. Nature mocked the vulnerability of man's best laid plans when since the early eighties; erratic seasonal rains and drought brought the VRA to its knees. Drought robbed the dams of so much water that in 1983, Ghana suffered extreme curtailment of power. Industry and much else suffered. VALCO's survival was threatened as it was forced to cut back on production a development that would no doubt would have been heartbreaking to the founding fathers who based the construction of the dam on the economic viability of VALCO. It would be an understatement to say that Ghana has not been the same since then. The dam's level, even at the time of writing this article - November 2001 - has fallen so low that, Ghana would have had to brace up for more power curtailments from VRA next year, 2002, but for the supply of the thermal power from the Takoradi Thermal Power Plant. The man made problem is as simple as its solution is even simpler: cost recovery. The VRA is generating power at ¢432/kWh and selling it at ¢194/kWh. It is not economics at play, but politics. VRA, which used to be a solvent foreign exchange earner, is now struggling to make ends meet. Ghanaians would have to sooner than later make up their minds on whether they will pay economic rates for electric power or drive VRA into complete and utter insolvency. This is an issue only Ghanaians can decide for themselves. In his conclusion to a public lecture on the 40th anniversary celebrations of the VRA, delivered on Tuesday November 20, 2001, Dr. Charles Wereko-Brobby, the current Chief Executive declared: At age 40, VRA should have been settling into a comfortable middle age, disposing wisdom and knowledge to lesser achievers within and without the sub-region. Unfortunately VRA's growth has followed an inverted path, which may have turned it into a spoilt rich kid largely oblivious of the realities of Ghana in which it grew up. For more than 35 years of its existence, 70% of VRA's revenues were earned in foreign exchange. Over the past five years, the Authority has had to turn onto fulfilling its original mandate of being the fount from which would flow Ghana's sustained social and economic development. The proportion of its earnings is now 70% domestic, inadequate and in an unstable currency. It is a remarkable testament to the durability and resilience of the philosophy and people that gave birth to and nurtured the institution, that today, it still represents the very best Ghana has to offer in sound and purposeful indigenous capacities and capabilities." V FACT SHEET The Volta River Authority (VRA) was established in 1961 under the Volta River Development Act 1961 (Act 46). Corporate Vision VRA seeks to be the national flagship for providing power and telecommunication services to support Ghana's social and economic development and that of the West Africa Sub-Region. Corporate Mission VRA is committed to being the leading supplier of safe, reliable and competitively priced electricity and related services. VRA's obligation to its owner, the state of Ghana, and financiers is to maintain a well managed, financially sound and decentralised power utility and subsidiaries. VRA strives to achieve a competitive position in the power markets both in Ghana and the sub-region and will pursue co-operation with other power utilities to improve reliability of power supply through effective harnessing of resources. The VRA crest and colours The VRA crest and colours are used as its symbol on letter heads, vehicles, structures etc. The crest consists of an outer triangle with a black border, into the apex of which is inserted the Black Star of Africa. Inside this outer triangle is set a smaller triangle bordered with a three-line band of black, gold and black. Along the three sides of the inner triangle (and that is in the space between the two triangles), the words "Volta River Authority" are set in white, gold and black, against a faint blue background. Here, inside the enlarged "0" of the word "Authority", a rotating silver wheel is set, signifying the rotation of turbines which generate electricity. The space inside the inner triangle itself is coloured green and carries a silver zigzag symbolizing the flash of lightning so closely related to the spark of electricity. Colours Black reinforces the Black Star of Africa
Gold symbolizes wealth
Blue represents the blue waters of the Volta Lake
Green promises the effects of irrigation for which the waters of the Volta Lake will also be utilized.
Silver considered appropriate colour representation for electricity
White stands for peace and tranquillity born of plenty
Main Functions
Power Activities
Development of the Hydro-electric potential of the Volta River.
Construction and operation of a transmission system for the supply of electrical energy for industrial, commercial and domestic use.
Bulk sale of electricity (local and foreign)
Distribution of electricity in northern Ghana
Generation facilities
Station/Capacity
Akosombo Generation Station / 912 MW - completed in 1965
Kpong Generating Station / 160 MW - commissioned in 1982
Takoradi Thermal Power Station / 550MW - completed in 2000
(Final 110MW to be completed by 2002)
Tema Diesel Station / 30MW - rehabilitated and commissioned in 1993
Transmission
VRA has a transmission network, comprising 36 substations countrywide and approximately 4,000 circuit kilometer of transmission lines.
VRA also operates interconnections to La Cote d'Ivoire in the south west; Lome, Togo in the south east, Dapaong, Togo, in the north-east of Ghana and Burkina Faso.
Customers (Local and Foreign)
Electricity Company of Ghana (ECG) which distributes electricity in southern Ghana
Major mining companies, such as AGC, and some industrial customers such as ATL, etc.
VALCO, which operates an aluminium smelter at Tema, Ghana.
VRA exports power to Togo and Benin (CEB) and exchanges power with La Cote d'Ivoire (CIE).
Non-Power Activities
VRA is responsible for providing facilities and assistance for the socio-economic development of the Volta Basin.
VRA is also involved in the operation of the following subsidiary companies:
The Akosombo Hotel Limited runs a 3-star hotel, restaurant, modern conference/seminar facilities, and provides pleasure activities and promotes tourism.
Volta Lake Transport Company operates river transportation for passengers, bulk haulage, and haulage of petroleum products on the Volta Lake. It also operates cross Lake Ferry services along the Iake.
The Volta Telecommunications Company (Voltacom) operates fibre optic telecommunications services.
Voltacom's prime objective is to maximise the value of VRA's assets in fibre optics and build the foundation for an active participation in the Information Technology industry.
VRA Resettlement Fund:
A Deed establishing the Resettlement Trust Fund was executed in July 1996. Under the deed, VRA is committed to provide the Cedi equivalent of US$500,000 annually to the Fund to carry out socio-economic projects among communities within the Volta Lake Basin.
The projects include:
Environmental Improvement
Social Welfare
Public Health
Education
Electricity
Water and Sanitation
PLANS FOR RELIABLE AND SUSTAINABLE ELECTRICITY SUPPLY
Takoradi Thermal Plant
The VRA in a joint venture arrangement with CMS Generation of Michigan, USA, is expanding the Takoradi Plant, from its present capacity of 550MW, to its ultimate capacity of 660MW on a fast track basis. Finance is being sought to construct the remaining 110MW which would bring the Plant to its full complement of 660MW.
WestAfrica Gas Pipeline (WAGP)
VRA is managing Ghana's 16.38% equity participation in the West African Gas Pipeline project. VRA's Takoradi Thermal Power Station has been identified as the foundation customer to anchor the implementation of the Project.
The availability of natural gas will expand Ghana's generation capacity.
IMPORTANT DATES FOR VRA:
1899 Survey into commercial exploitation of the Volta Basin. 1914 Discovery of the presence of bauxite near Mpraeso by Albert Kitson, a geologist.
1939 Duncan Rose, a Mining Engineer, started on-the-spot investigations into feasibility of an aluminium scheme.
1945 West African Aluminium Limited formed by Duncan Rose and Associates.
1948 Watson Report recommends the Volta River Project to be undertaken as a national concern.
1949 William Halcrow and Partners appointed Consulting Engineers to survey and report on potential of the Volta Basin.
1950 Halcrow's report submitted.
1957 United States President Eisenhower's indication of his government's willingness to finance the Volta Scheme.
1958 Kaiser Engineers commissioned to re-appraise the Project.
1960 Volta River Project Secretariat established.
1961 Volta River Authority established.
1962 Signing of Master Agreement between the Government of Ghana and the Volta Aluminium Company.
1962 Opening of the Tema Harbour.
1962 Formal start of work on the Akosombo Hydro-electric Project.
1964 Construction of the VALCO Smelter at Tema.
1965 Power first produced on commercial basis from the Akosombo Plant.
1966 Formal inauguration of the Akosombo Hydro-electric Project.
1969 Negotiation for the sale of power to Togo and Benin.
1972 Commissioning of Akosombo Expansion Project and Switch-On of Ghana- Togo-Benin Transmission Line.
1974 Messrs Acres International Limited and Shawinigan Engineering Limited both of Canada, commissioned to conduct a detailed study of the Kpong Hydro-electric Project
1977 Formal start of work on the Kpong Hydro-electric Project
1981 Switch on of first generating unit of Kpong Hydro-electric Project.
1982 Formal commissioning of Kpong Hydro-electric Project.
1983 Commissioning of VRA and Energie Electricque de la Cote d'Ivoire (EECI) Interconnection.
1983 (Dec.) System of planned power cuts introduced due to low inflows into the Reservoir. (water level at the end of rainy season in mid-October was 241.79ft (73.070m)
1985 Signing of Ghana-Valco Revised Master Agreements.
1986 (Dec.) 25th Anniversary of establishment of VRA.
1987 (Jan.) Northern Electricity Department established.
1987 (Nov.) Formal inauguration of Improved and Expanded Volta Lake Transport System.
1989 (May) Inauguration of New Wa Diesel Plant.
1989 (June) Inauguration of National Grid Extension to Brong Ahafo Region.
1989 (Dec.) Inauguration of National Grid Extension to Northern Region.
1990 (April) Inauguration of National Grid Extension to Upper East Region.
1990 (Dec.) Inauguration of Medical Boat. 1991
1991 Dredging of Volta Estuary at Ada begins.
1992 Akosombo Generating Station Retrofit Project begins
1993 Akosombo Generating Station Retrofit Project suspended.
1993 Environmental Impact Assessment Draft Report on the Takoradi Thermal Power Project publicly discussed.
1993 Update on Bui Feasibility and Prefeasibility Studies on Awisam and Hemang commissioned.
1993 Retrofitting of Kpong Generating Station begins.
1993 Rehabilitation of Tema Diesel Plant completed and put into service.
1994 Lake level falls to 239.48ft (72.00m), VRA declares force majeure on VALCO.
1994 Prefeasibility Studies for the interconnection of Ghana-Burkina Faso Power Systems completed.
1994 Preliminary Report on the GNPC/VRA Joint Tano Fields Natural Gas Exploitation Study submitted.
1994 Draft reports on the Bui Feasibility Study Update and Pra River Feasibility submitted.
1994 VRA Resettlement Trust Fund instituted ($500,000 annually).
1995 Constructional work begins on Takoradi Thermal Power Project.
1996 Joint Venture agreement signed between VRA and CMS Generation of Michigan.
1997 (Dec.) First Unit of Takoradi Thermal Plant commissioned.
1998 Second Unit of Takoradi Thermal Plant Commissioned
1998 (Feb.) System of planned power cuts introduced due to low inflows into the Reservoir. (Water Level at the end of rainy season in early November was 248.58ft (75.77m).
1999 Power Purchase Agreement between VRA and Takoradi International Company (TICO) signed.
1999 Shareholders Agreement executed between VRA, CSMG, TICO, TAPCO and CMST.
2000 Execution of joint Development Agreement for Tema Thermal Power Plant between VRA and AES.
2000 Takoradi Thermal Power Station inaugurated.

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Press, © 2002

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