Govt withdraws from Takoradi Power Plant saga

The government has taken a final decision to withdraw from acquiring any additional shares in the Takoradi International Company (TICO), the operators of the Takoradi Aboadze Thermal Plant (TATP).

Abu Dhabi National Energy Company (TAQA) of the United Arab Emirates (UAE) own 90% shares in TICO, while the government owns the remaining 10%.

The new chief executive officer (CEO) of Volta River Authority (VRA), Kweku Andoh Awotwi, disclosed this at Akuse in the Eastern Region.

He noted that TAQA will continue holding its 90%, while the government of Ghana will also hold its current 10%.

According to him, the government’s decision to withdraw from the deal is to save enough funds to develop the power generating sector and also to allow the majority shareholder to fully run the company by investing more in the Aboadze Thermal Plant. “Any additional shares involve lots of money,” he added.

Awotwi indicated that with this new arrangement, the TAQA Company will increase the power generated from the Aboadze Thermal Plant from the current 220 megawatts to 330 megawatts, an addition of 110 megawatts.

The previous government expressed interest in acquiring an additional 40% shares in TICO in order to bring its total stake in the power plant to 50%.

The negotiations started when TAQA became a shareholder of TICO in May 2007 after concluding a deal with CMS Energy to acquire the assets of its subsidiary, CMS Generation, which included the latter’s equity stake in the Takoradi Aboadze Thermal Plant (TATP).

The then government was displeased with the TAQA-CMS Energy deal, which was quickly concluded just about the time the country was battling one of its worst energy crisis.

Readers would remember that the crisis ended September 2007, but it was not certain whether the country’s energy sector would not be faced with yet another energy crisis in the face of the then rising crude oil prices on the international market.

Government was not pleased with CMS decision to sell off its stake at the time it did. It thus decided to buy a controlling share of about 51% before the then offer was put on the negotiation table.

The two parties were working on very divergent interests, while government was bidding for more stakes in the power plant, TAQA was also seriously trying to buy off all of government’s stakes.

CMS Energy concluded the transaction of selling CMS Generation to TAQA by selling its shares for about US$900 million. Apart from its 90% stake in the TATP, other interests went to TAQA. These were the Jorf Lasfar Energy Company in Saudi Arabia and the ST CMS Company in India.

By Fred SARPONG