Accra, March 5, GNA - The Ministry of Energy is to develop and sustain an efficient and financially viable energy sector that provides secure, safe and reliable supply of energy to meet Ghana's developmental needs in a competitive manner.

As part of measures to address the power crises in 2006/2007, which lasted over a year, Government supported the expansion of power generating capacity, the Minister of Finance, Dr Kwabena Duffuor said on Thursday in his budget statement to Parliament. These are 126MW Emergency Power Plants currently on standby after the power crisis and 80MW Power Plant by consortium of mining companies.

He said a number of power projects were also initiated as medium term strategies and fully funded by Government and VRA, which created substantial financial burden on the national budget.

These were 126 MW Tema Thermal Power Project (TT1PP); 49.5 MW Tema Thermal 2 Power Plant (TT2PP); engineering, procurement and construction of Gas Turbine Generators and balance of plant for the 230 MW Kpone Thermal Project in progress.

Additionally, as part of measures to resolve the power crises the Ministry on behalf of the Government of Ghana signed a power purchase agreement and a lease agreement with Balkan Energy Ghana Limited to refurbish, commission and commercially operate the 125 MW Osagyefo Power Barge. Dr Duffur said the contract was signed in 2007 and Balkan was to complete the project in 90 working days and further expand the plant by additional 60 MW subsequently.

"Balkan Energy has not met the deadline for operating the plant as works on the power plant, transmission lines and substations to evacuate power from the power plant are still ongoing."

The Minister said work started on the Bui Hydro Project in 2007. On rural electrification, Dr Duffuor said work on rural electrification in 31 communities in West Akim District was completed and commissioned. Material supply for the extension of power supply to 16 communities in Upper Denkyira district is almost completed.

Furthermore, 380 communities were connected to the national grid. On secondary gas distribution network development, he said cabinet approved six Legislative Instruments (LI) for regulating the Secondary Gas Market. Out of these, two were approved by Parliament. The remaining four are being reviewed at the Attorney General's Department before submission to Parliament. Dr Duffuor said the appraisal programme on the Jubilee fields being managed by Messrs KOSMOS Energy and Tullow Oil Ghana Limited was completed. These companies and other Jubilee partners are currently preparing the Development Plans.

He said the energy sector's outlook for this year was to rollout a programme for the Government's Energy For Growth Agenda. The key elements are (i) increase power generation capacity to 5,000 megawatts in the medium term, (ii) add capacity at the transmission and distribution levels, (iii) open up the sub sector to independent power producers and private sector participants, (iv) increase access to electricity in all households, (v) pursue regional cooperation projects, (vi) implement power sector reforms, (vii) strengthen the regulatory institutions and (viii) reduce the cost of electricity production to achieve lower tariffs.

He said VRA's 126 megawatts (MW) Tema Thermal 1 Power Plant (TT1PP) would be completed and commissioned in the first quarter of 2009. The 49.5 megawatt Tema Thermal 2 Power Plant (TT2PP) will be completed and commissioned by mid 2009.

The completion of the ongoing 230MW Kpone Thermal 1 Power Plant (KT1PP) at Tema and the Bui Hydro Power Project will be pursued. Additionally, the independent power producer initiatives will be supported to enhance private sector investments in power generation. The expansion of the Takoradi International Company (TICO) power plant at Aboadze into a combine cycle plant will be initiated. Dr Duffuor said the refurbishment of the 125 megawatts Osagyefo Power Barge (OPB) Project would be completed this year. The development of infrastructure for supply of natural gas from the Jubilee Field will be accelerated this year to ensure that gas from the field is utilised for the operation of OPB.

"The completion of these projects will add substantially to the country's power generating capacity and move us towards our vision of achieving 5,000 megawatts in the medium term.," he said.

The minister said the Ministry of Energy would continue to pursue efforts to get sustainable natural gas supply from the West African Gas Pipeline Project (WAGPP) for generation and other industrial uses. "The Ministry will ensure that the technical and operational difficulties regarding the delivery and the use of compressed gas are resolved. The use of natural gas will enable Government to achieve lower power generation cost and therefore lower electricity tariffs." 5 March 09