96890 PUBLIC-PRIVATE PARTNERSHIPS BRIEFS Ghana: Takoradi 2 Power Plant Overview Ghana’s growing economy has strained its power sector in spite of a high national electrifi- cation rate. In response, the Takoradi International Company, which owns and operates the Takoradi 2 power plant, sought financing to convert and expand the plant to allow it to run on both natural gas and light crude oil using technology that would increase capacity by 50 percent without using additional fuel. IFC supported the project with an $80 million loan as well as a $15 million loan from the IFC-Canada Climate Change Program. The OPEC Fund and a consortium led by FMO provided additional financing to fund the project. This series showcases how the World Bank Group supports the development and implementation of public-private partnerships. This support comes in the form of public sector loans, private sector finance, sector and transaction advice, guarantees, and output-based aid. PUBLIC-PRIVATE PARTNERSHIPS - MAY 2015 Background works including a pump house and intake and discharge chambers, and sub-sea outfall conduits Demand for electricity in Ghana has been steadily and diffusers situated approximately 1.2 kilometers increasing in step with its growing economy. While offshore. This final phase of T2 is expected to increase the country enjoys a relatively high electrification rate the generating capacity of the facility by 50 percent of 61 percent, growth in demand has stretched the without additional fuel requirements and without power sector, which mostly relies on hydro-generated increasing greenhouse gas emissions. This increases the power from Lake Volta. This has led to unmet demand overall capacity of T2 from 220 to 330 megawatts; the and unreliable supply, spurring the government to increased efficiency also lowers the cost of electricity pursue power sector reform. generated by T2. All power generated at the site is to The Takoradi Thermal Power Plant is located near be sold via an existing off-take agreement with the the town of Aboadze, just east of Takoradi on the VRA under terms of a revised 25-year power purchase south-western coast of Ghana. It was built as two agreement. The total project cost is approximately separate 330 MW combined cycle combustion $325 million. Completion is expected in 2015. units. Takoradi 1 (T1), operational since 1999, is owned by the Takoradi Power Company, a wholly- World Bank Group Role owned subsidiary of the state-owned power utility company, the Volta River Authority (VRA). In 2000, IFC provided an $80 million loan to TICO to help the Takoradi International Company (TICO), a expand its gas-fired Takoradi 2 power plant. In joint venture between Abu Dhabi National Energy addition, IFC provided a $15 million loan to TICO Company PJSC (TAQA) (90 percent) and the VRA from the IFC-Canada Climate Change Program, (10 percent), completed construction and began which is part of Canada’s commitment to support operating the second combustion unit, Takoradi 2 climate change action in developing countries. The (T2). T2 accounts for 15 percent of Ghana’s installed OPEC Fund for International Development provided power production capacity. an additional $22.5 million for the project, and a consortium of international development finance To increase the efficiency and capacity of T2, TICO institutions led by FMO of the Netherlands provided proposed converting and expanding the plant to $330 million in debt financing. TAQA also made a operate in combined cycle mode with the addition $25 million equity investment into the project. of a 110 megawatt steam turbine and generator. The plant previously ran on light crude oil, but increasing The financing demonstrates IFC’s longstanding offshore gas finds in Ghana, and Nigerian gas now commitment to the Ghanaian electricity sector, and flowing to Ghana through the West African Gas also complements IFC’s work in the country’s oil and Pipeline, made dual fuel capability feasible. gas sector. Project Description Outcomes Key features of the T2 expansion project include • Increases the generation of electricity from 220 to the addition of two heat recovery steam generators, 330 megawatts, contributing to greater power genera- a 110 megawatt steam turbine generator, two 60 tion capacity in the country to spur economic growth. meter stacks, and a seawater desalination plant. • Provides the first commercial project financing for an In addition, a once-through cooling water system independent power project in Ghana, demonstrating supports operations at both T1 and T2, thereby how the private sector can help increase supply and removing reliance of T2 on freshwater. The cooling reduce the cost of power generation in West Africa. system includes a sub-sea intake structure located • Expands power generation capacity and efficiency 2.5 kilometers offshore, intake conduits, onshore without increasing greenhouse gas emissions. 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