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AfDB approves 32 million dollars loan for Tema Power Project

By GNA

The African Development Bank Group's Board of Governors on Tuesday in Tunis approved a 32 million dollar private sector loan to Tema Osonor Plant Limited, a special purpose vehicle incorporated in Ghana to finance the country's Tema Power Project.

A press release received by the Ghana News Agency (GNA) on Friday said the loan will help finance the design, construction and operation of a 126-Megawatt thermal power station at Tema.

The primary fuels of the station will be natural gas with light crude oil and distillate fuel oil serving as secondary fuels. The gas will be transported to the project site from Nigeria through the West African gas Pipeline (WAGP) Station.

The project, which will help diversify national power generation and reduce current load shedding, is in line with the government's Growth and Poverty Reduction Strategy and the AfDB's strategy for Ghana.

The project is also aligned to the Bank's Private Sector Operations Strategy, as it will contribute to the construction of competitive infrastructure and support a business enabling environment in Ghana.

The statement said the project was expected to create from 150–200 skilled and unskilled jobs during the construction phase and another 100 during its commercial operation.

“The project company will build capacity and technical expertise in modern power generation plant management by providing appropriate training to local employees.

“This will help sustain long-term thermal power generation in Ghana while also encouraging indigenous private sector participation in this critical sector.”

The statement said other project goals included the promotion of indigenous, investor-led power production in Ghana, the shifting of the burden of investment for power generation from the central government to the private sector, the building and sustaining of local capacity in the development and maintenance of power generation infrastructure, and the diversification of the power generation mix.

The AfDB's participation in the financing of the project has been welcomed by local banks which have provided financing for the gas turbine.

The total cost of the project is estimated at US$ 140 million, to be financed through an equity injection of 44 million dollars and loans of 96 million dollars from the AfDB, the Energy Africa Infrastructure Fund and the Entrepreneurial Development Bank of the Netherlands, which will also provide a 10 million dollar unsecured loan.

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