GHANA and its neighbouring states have long been associated with hydroelectric power, largely as a result of the development of the Volta River Authority’s (VRA) Akosombo hydro plant, which was developed in the 1960s. Yet over the past few years, Ghana has changed from being West Africa’s biggest electricity exporter into a net importer. Now that the West African Gas Pipeline (WAGP) project has been given the go-ahead, the region as a whole is looking more towards gas fired generation capacity. However, hydro sector investment may not yet be at an end in West Africa.

It is difficult to overestimate the impact of the series of droughts over the years 1997-2000 on energy sector policy in West Africa. Ghana had relied on hydroelectric projects for most of its independent history and the 912MW Akosombo plant produced most of the power consumed within the country during the 1990s and allowed the VRA to export surplus electricity to Cote d’Ivoire and other neighbouring states. But the prolonged lack of rainfall resulted in a substantial fall in water levels on the giant Lake Volta, resulting in severe power rationing across the region. The water level dropped by 74m at one point in 1998, slashing generating capacity by over 600MW to just 300MW.

This prompted the governments of Ghana and Cote d’Ivoire to commit themselves to developing gas fired plants in order to reduce the region’s reliance on hydroelectric schemes. Cote d’Ivoire had already begun to make the most of its own gas resources and the 288MW Azito thermal plant came on stream in 1999. Today the country generates over half of its electricity from gas fired facilities. The new plants, combined with the lack of new capacity development in Ghana, resulted in Cote d’Ivoire eventually beginning to export electricity to its eastern neighbour.

Nevertheless, Cote d’Ivoire retains a large hydro sector. The country possesses hydro generating capacity of 614MW spread over a number of different sites, including the 180MW Buyo and 50MW Ayame facilities. Construction of the planned 350MW Soubre hydro scheme was due to begin last year but the civil conflict in the previously stable country has held up progress on this and almost all other infrastructure projects.

The main choice in Ghana did not centre on installing new hydro or gas fired capacity but on whether to import electricity from gas fired plants in Cote d’Ivoire or from new domestic thermal facilities. It was decided to import Ivorian electricity in the short term and construct new gas fired plants in the longer term. Ghana possesses relatively small proven gas reserves and Ivorian gas was considered for a time but Nigeria’s vast gas reserves were the most obvious option for feedstock.

Nigeria had long hoped to export gas to the rest of West Africa via the WAGP but it took a long time to get the project off the ground. However, construction work is now underway and the Chevron-led West African Gas Pipeline Company (WAPCo) expects first deliveries by 2007. Although spur pipelines will also supply gas to Benin and Togo – which could reduce the VRA’s ability to export electricity from the Akosombo dam – Ghana is certain to receive about 90% of the gas transported by the pipeline and most of this is expected to be consumed by thermal power plants at Tema and Takoradi, which are being converted from oil to gas and are also being expanded.

New hydro capacity on the cards

Despite the construction of the WAGP, Ghana’s association with hydro power is set to continue through the modernisation of the Akosombo facility and the construction of new dams. In the middle of last year, the Ghanaian government published its National Strategic Energy Plan, which laid out the nation’s energy strategy over the years 2005-2025. Four hydro schemes are scheduled for development during this period: Bui should be in place by 2012, Hemand and Juale by 2015, and Pwalugu by 2020. In addition, generating capacity at Akosombo and Ghana’s second biggest hydro scheme, the 160MW Kpong project, could be increased by a combined 160MW.

The Bui hydro project will be developed on the Black Volta river in Brong-Ahafo region. Although the venture was originally proposed during the 1970s and prospects for its development have been revived on several occasions over the past 30 years, the government seems keen to finally see it constructed. The Ghanaian and Chinese government signed a Memorandum of Understanding on the development of the project by Chinese firm Sino Hydro in November last year. An environmental impact assessment (EIA) is currently being carried out but the two governments have yet to publish full details of project funding or the timetable for development.

The government has listed the scheme for development for many years but the resulting flooding of part of Bui national park has been opposed by environmental groups. Previous government statements have indicated that the hydro venture would be developed on a build operate transfer (BOT) basis, with 400MW of new capacity added at a cost of US$700M. Apart from improving the provision of power within Ghana, the government hopes that the facility will have surplus electricity to export to Cote d’Ivoire, Mali and Burkina Faso.

A further BOT contract has been mooted for another hydro project, on the Pra river, with generating capacity of 125MW. With average annual rainfall of 2500mm, Ghana is certainly well blessed by water resources but the number of suitable sites for dam projects is limited because of the number of people who would be affected by flooding and the extent of the likely environmental damage.

However, it remains to be seen what impact the resignation of the Executive Secretary of the Energy Commission, Kofi Asante, will have on the implementation of the National Strategic Energy plan. The government of President John Kufuor insists that it is committed to maintaining a mix of thermal and hydro generating capacity, both through the maintenance of Akosombo and through the development of new hydro schemes but it remains to be seen if sufficient funding will be forthcoming.

While the drought of 1998-99 highlighted a general trend away from hydro schemes and towards gas fired plants, the devastation caused by the drought had prompted the development of small scale dams on a local basis, to trap water for agriculture. Some were developed by land owners or local government authorities but more recently the national government has become involved in the process. In July last year, Vice President Alhaji Aliu Mahama announced plans for the development of a large number of dams for agricultural purposes spread across a wide swathe of the country.

Up to 36 dams are scheduled for construction in the Northern, Upper East and Upper West regions, almost entirely for irrigation. It was revealed that some of the dams developed on a local basis had been inadequately constructed and so the government was keen to ensure that proper construction techniques were used. The government has offered to contribute US$60M to the development of the various dam projects but it has not revealed the total construction costs for the 36 schemes. In addition, training courses are being offered in small scale dam construction but it is likely that contracts will be offered to interested private sector parties on the larger projects. Apart from countering the effects of future droughts, it is hoped that the new reservoirs will extend the growing season, which is restricted because eight months of the year are largely dry, even during an average year.

When Ghana achieved independence in 1957, it was hoped that the Volta dam scheme would provide a platform for industrialisation. This failed to materialise but the current government is again banking on the power sector to enable the creation of a sizeable industrial and manufacturing sector. This time, however, the giant Volta dam venture will be accompanied by new hydro schemes and a number of gas fired power plants as Accra hopes that a balanced generation mix, including a large element of hydro capacity, will provide a more secure base for economic expansion.

The west african power pool

Ghana’s Resource Centre for Energy Economics and Regulation (RCEER) now estimates that thermal facilities will account for 50% of the country’s generation mix by 2010. Given that Ghana is currently forced to import power and demand for electricity is rising at around 6% a year, it seems that there will be a market for all the power projects currently under development or on the drawing board. The government has plans to provide electricity to the entire country by 2020, but the pace of the electrification programme will have to be greatly stepped up if this is to be achieved. However, the emergence of the West African Power Pool (WAPP) should ensure that the VRA and other investors can develop any economically viable hydro schemes in the knowledge that excess generating capacity can be exported further afield.

Progress on developing the various cross-border interconnectors that are required to complete the physical infrastructure of the WAPP has been slow to date. Moreover, civil war and the ongoing unrest in Cote d’Ivoire have prevented one of the region’s biggest economies from pushing for the development of improved regional transmission links. However, the Economic Community of West African States (ECOWAS) has put the project near the top of its list of economic priorities, while one of the New Partnership for African Development’s (NEPAD) main focuses is the promotion of cross-border infrastructure projects.

In addition, economic growth and rising electricity consumption in Ghana and Nigeria have prompted both governments to push for more rapid progress on WAPP and with the involvement of companies such as South Africa’s power giant Eskom and the emergence of similar regional power grids in South, North and East Africa, it seems likely that the WAPP will eventually come into being. The 14 members of the Economic Community of West African States (ECOWAS) signed an agreement in 2000 to make the long awaited WAPP a reality. The first phase will connect Ghana with Nigeria, Benin, Burkina Faso, Côte d’Ivoire, Niger and Togo.

Ini Urua, of the Nepad unit at the African Development Bank, commented: ‘The pooling and sharing of energy resources would revolutionise the power sector in West Africa. Integrating power systems would enable countries to have a reliable and affordable supply of electricity.’ Funding for WAPP has already been promised or is likely to be forthcoming from a variety of bilateral and multilateral donors and lenders, including the World Bank, the European Investment Bank (EIB), the West African Development Bank, Agence Française de Développement and the Nordic Fund for International Development.

The Akosombo plant, lying around 80km from the Ghanaian coast, will be the biggest generating facility within the WAPP but other hydro schemes could also benefit on the Niger river in Nigeria, on the Bafing in Mali and on the Bandama in Cote d’Ivoire. The Manantali hydro project in Mali could also export its electricity further afield with the completion of the second phase of grid development. The 200MW project came on stream at the end of 2001 and transmission lines already carry its output to three capital cities, Dakar in Senegal, Nouakchott in Mauritania and Bamako in Mali.

WAPP cooperation is also spilling over into other forms of power sector cooperation. In February 2004, the energy ministers of Benin and Togo agreed to jointly develop a 100MW hydro scheme at Adjaralla on their common border. Both countries currently rely on electricity imports and were as badly hit as Ghana by the impact of drought on production at Akosombo. At present, the largest hydro facility in Benin is the 66.4MW Nangbeto scheme, although planned projects include a 72MW hydro plant at Ketou, the 42MW Olougbe facility and the 36MW Assante plant.

Despite fears that the development of the WAGP project would rule out further hydro developments in Ghana, new dams are almost certain to be built. Irrigation and power generation requirements have pushed Accra into action and it appears that hydro schemes are considered as part of a viable generation mix and although the proportion of total electricity output produced by hydro projects will fall, overall hydro generating capacity will rise as a result of rising electricity consumption and regional power sector integration. The Volta dam scheme and the Akosombo plant will remain the largest hydro venture in the region but they will not be the last.