The Volta River Authority (VRA) plans to build a 300-500 megawatt power-generation facility in the next four years, estimated at a cost of US$300-500 million, to meet the country’s increasing power demand.

“Currently, we’re seeking advice and approval from our board on how to finance the project.

The discussion is ongoing, so let’s wait for the completion first,” Chief Executive Officer of VRA, Kweku Andoh Awotwi, told Business and Financial Times in an exclusive interview.

When asked whether government would finance the project, he said: “Government itself has taken a view that there must be other investments in the market -- and government is not going to continue supporting VRA; at least, that is how we understand it.

“Otherwise, it would not bother to deregulate the market. So that means we have to look for these funds in the market -- it does not have to be listing on the Ghana Stock Exchange, one can raise money from other sources. ”

He added: “We’ve put the equity idea on the back-burner for now – not because it’s not a good idea, but we think there are other ways to raise funds. ”

Ghana’s power sector is undergoing a period of change, with a spurt of new projects that will raise total installed generation capacity in the country by 65 percent to a total 3,600 megawatts by 2013.

According to the Ghana Power Report 2011, the increase in supply is timely, with power-generation reserve capacity in the country falling to critical levels in recent years.

The report said demand for electricity has fast outpaced new investments in power-generation capacity over the past decade, reaching a peak-power demand of 9,131 GWh in 2010.

From 2000 to 2009 residential demand has risen by 61 percent, driven by rapid urbanisation and high economic growth. Fifty-two percent of the population now live in cities (up from 42 percent in 2000), and their incomes have increased as a result of economic growth averaging 5 percent annually.

At the same time, industrial demand has grown by 64 percent on the back of the gold-mining sector’s strength.