News Guide Africa

Tag: Energy sector

  • ‘Unsatisfactory’ rating stuns energy sector as bailout programme bleeds US$1.5bn – World Bank

    ‘Unsatisfactory’ rating stuns energy sector as bailout programme bleeds US$1.5bn – World Bank

    By Adnan Adams Mohammed

    Global financial markets are reeling after the World Bank stripped Ghana’s Energy Sector Recovery Programme (ESRP) of its stable status, issuing a damning “Unsatisfactory” evaluation that threatens to derail investor confidence.

    The multilateral lender’s sharp downgrade exposes a widening rift within state bureaucracy, squarely blaming rigid fiscal controls by the Ministry of Finance, disbursement caps, and election-driven political paralysis for stalling critical electricity sector reforms.

    As energy utility losses compound to a staggering US$1.5 billion, the severe downgrade has sent a wave of anxiety through international asset managers and local business leaders, who warn that the country’s broader economic recovery remains highly vulnerable to political paralysis.

     

    The Anatomy of a Disappointing Performance

    Approved in June 2024 and activated in March 2025, the ESRP was designed to rescue the bleeding finances of the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo). Instead, the World Bank revealed that the energy sector’s financial hemorrhage has dramatically worsened.

    Combined losses for ECG and NEDCo have ballooned to approximately US$1.5 billion nearly three times the program’s 2027 target threshold of US$525 million. Furthermore, ECG’s revenue collection efficiency has deteriorated to 85%, falling below its initial baseline of 86%, and drifting far from its 93% target.

    The Bretton Woods institution repeatedly laid the blame squarely on a lack of government cooperation and structural friction. The phrase “No Commitment Authorization from MoF to allow for disbursements needed to facilitate achievement of targets” echoes throughout the assessment, highlighting how the Finance Ministry’s new procurement controls have effectively starved the program of its lifeblood.

    Key initiatives, including a crucial project to deploy over one million smart meters, an electronic Independent Power Producer (IPP) invoicing system, and the distribution of clean LPG cooking stoves, have all ground to a complete halt.

    The Investor Perspective: Alarm and Scepticism

    For international investors, sovereign bondholders, and domestic business leaders, the World Bank’s assessment confirms their worst fears about institutional gridlock and structural risk in Ghana.

    “This downgrade is a major red flag for the market,” warned Richmond Duah, an emerging markets fixed-income analyst. “Energy sector debt has long been the Achilles’ heel of Ghana’s public finance. When the World Bank explicitly notes that the state had to pump GH¢12.9 billion from the treasury into the energy sector in 2025 despite taxing citizens with an additional petroleum levy it tells investors that the structural deficit is far from fixed. Fiscal consolidation cannot succeed if the energy sector remains a bottomless pit.”

    International institutional investors, who closely monitor World Bank metrics as a proxy for governance health, express growing weariness over the repeated execution failures cited in the report.

    “Procurement bottlenecks and election-year paralysis are excuses that international capital markets are growing tired of hearing,” said a London-based portfolio manager who spoke on the condition of anonymity. “The fact that GRIDCo couldn’t even procure the consultants needed to implement a cheaper power-dispatch methodology because the Finance Ministry wouldn’t sign off on funds is deeply discouraging. It suggests a lack of alignment between ministries, and that political risk continues to trump economic logic.”

    Domestic business groups are equally distressed, noting that the operational inefficiencies at ECG directly translate into higher tariffs and unpredictable supply for commercial users.

    “The private sector pays the ultimate price for these bureaucratic delays,” stated a representative from the Association of Ghana Industries (AGI). “If ECG cannot integrate an IPP invoicing system or complete a basic energy accounting system in more than 20% of its districts, how can we expect a stable, cost-competitive power sector? The state must treat this ‘Unsatisfactory’ grade as an absolute emergency.”

     

    A Roadmap to Redemption?

    Despite the grim assessment, the World Bank has not entirely abandoned the program. The multilateral lender noted that it expects implementation to accelerate significantly but only if coordination drastically improves between the central government and the implementing agencies, particularly regarding the Ministry of Finance’s rigid approval processes.

    Restoring the sector’s financial health will require more than just raising taxes or introducing new levies; it demands a relentless, transparent execution of the structural reforms aimed at efficiency.

    As of press time, both the Ministry of Energy and the Ministry of Finance have remained tight-lipped, failing to respond to official requests for comment regarding how they intend to repair the fractured program and reassure nervous markets.

     

  • NPA slashes fuel price floors amid flood safety shutdowns

    NPA slashes fuel price floors amid flood safety shutdowns

    By Adnan Adams Mohammed

     

    In a major development for the country’s energy sector, the National Petroleum Authority (NPA) has ordered the immediate suspension of operations at all fuel retail outlets impacted by recent severe flooding, while simultaneously issuing a sharp downward revision of petroleum price floors ahead of July’s first pricing window.

    The dual announcement brings critical safety enforcement to the fore while paving the way for substantial financial relief at the pumps for motorists, businesses, and transport operators.

    Mandatory Safety Shutdowns Ordered

    Following torrential downpours that left parts of the country inundated, the NPA issued a strict directive to all Oil Marketing Companies (OMCs), fuel station operators, dealers, and transporters to immediately halt activities at flooded facilities.

    According to an official notice from the regulator, operators must immediately cease all fuel dispensing, loading, and offloading activities if floodwaters breach forecourts, tank areas, manholes, or vent pipes. The NPA highlighted the catastrophic risks of fuel contamination, hazardous leaks, and potential explosions.

    “Immediately cease all fuel dispensing, loading, and offloading activities where floodwater has inundated the forecourt, tank area, or entered tank manholes, fill points, or vent pipes,” the Authority ordered.

    Operators are mandated to isolate electrical power, evacuate staff and customers, and establish a safety exclusion zone of at least 100 meters around affected stations.

    The regulator further warned against premature or unauthorized reopenings. Operations can only resume after floodwaters recede, a joint safety inspection is conducted by the NPA and the Ghana National Fire Service (GNFS), and underground equipment is certified safe.

    “Any station found to have resumed operations without the required safety clearance shall be subject to enforcement action, including suspension of operations, regulatory sanctions, and prosecution where applicable,” the NPA stated.

    The regulator also cautioned the general public to avoid driving through or interacting with floodwaters near affected fuel stations, adding: “Refrain from coming into contact with floodwater in and around affected stations, as it may contain petroleum products or other hazardous contaminants.”

    Sharp Contraction in Price Floors

    While safety restrictions tighten, consumers are positioned for economic relief. An industry notice reviewed by Citi Business News reveals that fuel price floors for the upcoming pricing window have collapsed, following a decline in global crude oil prices to roughly US$70 per barrel, which has erased earlier geopolitical risk premiums.

    The NPA has pegged the new petrol price floor at GH¢12.79 per litre, a 4.5% drop from the GH¢13.39 per litre recorded in mid-June. Diesel has seen an even steeper reduction, sliding 10.4% to GH¢13.54 per litre from GH¢15.11. Liquefied Petroleum Gas (LPG) recorded the most significant contraction, with its floor slashed by 23.6% to GH¢10.11 per kilogram down from GH¢13.23.

    These price floors serve as the minimum legal thresholds at which OMCs and LPG Marketing Companies (LPGMCs) can retail products under the Petroleum Products Pricing Guidelines (PPPG).

    Because the mandatory floors do not include international premiums or the independent operational margins of bulk importers and marketers, final pump prices may vary. However, if OMCs successfully transmit this margin relief to consumers, the move is expected to cool recent inflationary pressures and lower national logistics and transport expenditures.

     

  • Ghana Gas and NPA tighten bonds to fuel downstream petroleum sector growth

    Ghana Gas and NPA tighten bonds to fuel downstream petroleum sector growth

    The leadership of Ghana’s energy sector has signaled a deeper commitment to regulatory synergy and operational excellence, following a high-level meeting between the country’s premier gas company and its petroleum downstream regulator.

    On Tuesday, 16 June 2026, the Chief Executive Officer of the Ghana National Gas Limited Company (Ghana Gas), Ms. Judith Adjobah Blay, led a management delegation to pay a crucial courtesy call on the Chief Executive Officer of the National Petroleum Authority (NPA), Mr. Godwin Kudzo Tameklo (Esq). The engagement marks a decisive step forward in harmonizing state operations to better serve commercial consumers and secure the national grid.

    The high-level engagement builds upon an initial meeting held in August last year, which aimed to explore mutually beneficial pathways to drive sustainable growth across Ghana’s petroleum downstream sector.

    Tuesday’s discussions centered primarily on promoting the smooth operations of Ghana Gas and facilitating robust, long-term partnerships between the two state entities.

    Aligning Strategic Vision

    Speaking during the visit, Ms. Judith Adjobah Blay emphasized the vital importance of regular dialogue in maintaining operational harmony between the regulator and the utility provider.

    “Following the meeting we had in August last year, we agreed to meet again and discuss a few more technical issues that have bearing on the work of NPA and Ghana Gas,” Ms. Blay noted.

     

    She further highlighted the impact of their collaborative efforts on the wider business community, stating:

    “This is because we serve businesses and sometimes these meetings are very necessary to be held often, so that we can be on the same page as to how we serve these companies that come to us.”

     

    Guaranteeing Operational Efficiency

    Responding to the Ghana Gas delegation, the NPA Chief Executive, Mr. Godwin Kudzo Tameklo (Esq), expressed gratitude for the visit and reaffirmed the regulatory body’s unwavering commitment to supporting Ghana Gas’s mandate. He assured the delegation that the NPA would continue to execute its regulatory functions diligently to safeguard the company’s operations.

    “I personally want to thank the CEO of Ghana Gas for the visit, and we want to assure that NPA will return the favour,” Mr. Tameklo remarked.

     

    He further pledged the Authority’s hands-on support to alleviate operational bottlenecks:

    “We will intensify our operational efforts in areas that we need to, to make your work less difficult and ensure that your operations move on smoothly. I am sure that we have agreed on decisions that will benefit both organisations collectively and the NPA will deliver on its part of the bargain for the greater good of our sector.”

    A Unified Front for the Energy Sector

    The successful meeting underscores a renewed and fortified partnership between the National Petroleum Authority and Ghana Gas. Industry observers view this alignment as a critical step forward, highlighting a shared national commitment to operational efficiency, regulatory synergy, and the sustainable advancement of Ghana’s broader energy landscape.

     

  • Ghana targets strict energy reforms to curb debt, projects oil production growth

    Ghana targets strict energy reforms to curb debt, projects oil production growth

    By Adnan Adams Mohammed

    Ghana’s energy sector is undergoing a major structural turnaround, aiming to address persistent debt while reversing years of declining oil production.

    Through a combination of aggressive state-owned enterprise (SOE) overhauls, strategic investor interventions, and targeted consumer cushions, the government is moving to secure the country’s long-term energy independent future.

    The comprehensive strategy addresses both upstream production deficits and downstream financial leakages to restore full investor confidence in the nation’s energy markets.

    Cracking Down on Energy Sector Debt

    At the core of the new policy drive is an unyielding approach to the financial imbalances that have historically weighed down Ghana’s power sector. Finance Minister Dr. Cassiel Ato Forson announced that the government will enforce strict operational and financial disciplines across all energy-related State-Owned Enterprises, including the Electricity Company of Ghana (ECG) and the Ghana Grid Company (GRIDCo), to permanently halt the accumulation of energy sector debt.

    The central government will no longer offer open-ended financial lifelines to underperforming utility companies.

    “We are introducing strict performance-based contracts and rigorous oversight mechanisms for all energy sector SOEs,” Dr. Forson stated. “The days of the central government absorbing inefficiencies and uncollected revenues are over. Every state agency in the energy value chain must operate with corporate commercial discipline, optimize its revenue collection, and account for every megawatt distributed.”

    The Minister emphasized that plugging these financial leakages is critical to stabilizing the broader macroeconomic environment. “Curbing the rising energy sector debt is not just about keeping the lights on; it is about protecting our national treasury and signaling to international markets that Ghana is serious about fiscal sustainability,” Forson added.

    Reversing the Six-Year Upstream Decline

    The financial reforms arrive alongside highly anticipated positive news from Ghana’s upstream petroleum sector. After nearly six consecutive years of diminishing crude oil output from major fields like Jubilee, TEN, and Sankofa, energy officials confirmed that production curves are officially projected to rise.

    This turnaround follows targeted regulatory adjustments and negotiated asset expansions designed to restore weakened investor confidence.

    “We have successfully reversed the power deficits, arrested the decline in oil production, and restored investor confidence that had visibly softened over the last few years,” an absolute representative from the Ministry of Energy noted during a technical briefing.

    The ministry attributes this production shift to aggressive well-drilling campaigns and altered contractual terms that made drilling in Ghana’s deepwater blocks commercially viable once more. “For the first time in almost six years, Ghanaians can expect a verifiable increase in domestic crude oil production. This means expanded fiscal space, heightened employment opportunities in the oil services sector, and a stronger position for our national oil company, GNPC,” the official stated.

    Extending Consumer Cushions Against Global Volatility

    While the government focuses on long-term structural fixes, it is also taking immediate steps to shield citizens from volatile international energy prices. Due to ongoing geopolitical tensions and fluctuating global crude benchmarks, the administration announced a formal extension of its targeted fuel price intervention.

    The intervention utilizes strategic adjustments in petroleum transport levies and domestic refinery partnerships to keep prices manageable at the pumps.

    “We recognize that the global energy market remains highly unpredictable, and our citizens cannot bear the brunt of that volatility alone,” the Ministry of Finance announced in an official policy statement. “Government has therefore taken the decision to extend the fuel price intervention mechanism to cushion consumers against rising costs.”

    Administration officials clarified that these interventions are structured to avoid creating new state deficits, relying instead on optimized revenue flows from the newly surging upstream oil sector to balance the consumer cushions. By combining immediate relief at the pumps with structural discipline across utility companies and a revival in offshore drilling, Ghana is positioning its energy sector to act as a primary catalyst for economic expansion rather than a financial bottleneck.

     

  • The Power Conundrum: Leadership and investment gaps fuelling Ghana’s power crisis

    The Power Conundrum: Leadership and investment gaps fuelling Ghana’s power crisis

    By Adnan Adams Mohammed

    Ghana’s energy landscape is currently caught in a volatile tug-of-war between aging infrastructure and a surge in demand.

    As recent technical failures, including a major fire at the Akosombo switchyard, have dominated headlines, energy experts warn that the real crisis lies deeper: in a “trifecta” of poor planning, communication breakdowns, and a massive investment deficit.

    A crisis of leadership and logic

    The recurring nature of the country’s power outages, popularly known as dumsor, has drawn sharp criticism from policy analysts.

    Benjamin Nsiah, an energy sector commentator, argues that the current instability is not merely technical but a failure of governance.

    “The energy sector is currently facing significant planning, communication, and leadership challenges,” Nsiah stated. He pointed out that the lack of a transparent, published load-shedding timetable has left businesses and households in the dark, both literally and figuratively. “Without clear communication and a proactive leadership approach, the sector will continue to react to crises rather than prevent them.”

    The billion-dollar investment gap

    While leadership is under fire, others point to the cold, hard reality of economics. Michael Aidoo, a prominent energy consultant, highlighted that the grid’s frailty is a direct result of years of underfunding.

    “The recurring power issues we are seeing today are tied inextricably to massive investment gaps,” Aidoo explained. He noted that as the population grows and industrialization efforts expand, the existing transmission lines and transformers are being pushed past their breaking points. “We are operating a 21st-century economy on a 20th-century backbone. Until we bridge the financing gap for infrastructure upgrades, these outages will persist.”

    Akosombo fire: A wake-up call

    The vulnerability of the system was laid bare recently when a fire broke out at the Akosombo switchyard, a critical node in the nation’s hydroelectric heart. The incident caused widespread blackouts, forcing the government into a defensive posture.

    In response, the Ministry of Energy announced an emergency “system upgrade” to modernize the switchyard and surrounding infrastructure. “The government is moving swiftly to upgrade the power system following the Akosombo switchyard fire,” a ministry spokesperson confirmed. Officials stated that the upgrade is intended to build redundancy into the grid so that a single failure at one plant does not trigger a national collapse.

    The frontlines: Afram Plains and regional stability

    Despite the systemic gloom, there have been pockets of operational success. The Electricity Company of Ghana (ECG) recently completed a high-stakes repair mission to restore power to the Afram Plains. The area had been plunged into darkness after a submarine cable—the lifeblood of the district’s power supply—was severely damaged.

    “Our technical teams worked around the clock in challenging marine conditions to restore the cable,” an ECG representative noted. The restoration was met with relief by local residents who had been without power for days, disrupting local trade and healthcare services.

    Karpowership: A stabilizing force?

    As the country seeks long-term solutions, independent power producers (IPPs) continue to play a pivotal role. In the Western Region, local leaders have expressed vocal support for Karpowership Ghana. During a recent facility visit, Western Regional Chiefs lauded the company for its consistent contribution to the national grid.

    “We appreciate the stability that Karpowership brings to our region and the country at large,” noted one of the traditional leaders. The chiefs emphasized that while the nation works on its permanent infrastructure, such strategic partnerships are essential to keeping the lights on for local industries.

    The path forward

    The consensus among stakeholders is that a “quick fix” is no longer an option. Between the technical restoration of submarine cables and the strategic praise for floating power plants, Ghana sits at a crossroads. Industry observers maintain that unless the government addresses the “leadership challenges” cited by Nsiah and the “investment gaps” flagged by Aidoo, the cycle of outages will continue to haunt the nation’s economic ambitions.

     

     

  • Fuel Levies: ACEP backs One-Cedi power tax as protesters demand immediate scrap

    Fuel Levies: ACEP backs One-Cedi power tax as protesters demand immediate scrap

    A sharp divide has emerged over the future of Ghana’s energy sector financing, as energy experts and grassroots activists clash over the necessity of fuel-related levies amidst a biting cost-of-living crisis.

    At the center of the storm is a proposed one-cedi levy on petroleum products, which the Africa Centre for Energy Policy (ACEP) describes as a “bitter pill” necessary to prevent the total collapse of the national power grid.

    “The Sector is Gasping” – ACEP

    Speaking on the dire state of the energy industry, the Executive Director of ACEP, Ben Boakye, argued that the one-cedi levy is essential to address the systemic debt choking the sector. According to Boakye, the revenue generated from this levy is the only immediate lifeline available to keep the power sector afloat.

    “The reality is that the power sector is gasping for breath under the weight of legacy debts and operational inefficiencies,” Boakye stated. He explained that without a dedicated funding stream to settle arrears owed to Independent Power Producers (IPPs) and fuel suppliers, the country risks a return to protracted load shedding (Dumsor).

    Boakye emphasized that while the timing is difficult for consumers, the alternative

    a complete breakdown of the power system would be far more expensive for the Ghanaian economy.

    The People’s Forum Hits Back

    However, this technical justification has found little sympathy with the “People’s Forum,” a pressure group that has officially petitioned the government to scrap all fuel-related levies.

    The group, representing a cross-section of frustrated drivers, traders, and ordinary citizens, argues that the cumulative burden of taxes on petroleum products has become “extortionate.” In their petition, they highlighted that fuel prices serve as a catalyst for inflation, driving up the cost of food and transport to unbearable levels.

    “We cannot be the ones to always pay for the mismanagement of the energy sector,” a spokesperson for the People’s Forum noted during a press briefing. “The government must find other ways to plug the holes in the budget rather than squeezing the last cedi out of the pockets of struggling Ghanaians.”

    A Policy Dilemma

    The government now finds itself in a precarious position. On one side, technical experts like ACEP warn that the energy sector faces a $1.5 billion shortfall that could trigger a national blackout. On the other, the People’s Forum represents a growing public sentiment that the populace has reached a “breaking point” regarding taxation.

    The fuel-related levies currently include the Energy Sector Levy (ESLA), the Sanitation and Pollution Levy, and the Special Petroleum Tax, among others. The addition of a new one-cedi levy, or the maintenance of existing ones, remains a political lightning rod.

    As the Ministry of Finance reviews the petitions from the People’s Forum, the energy industry watches closely. For Ben Boakye and ACEP, the choice is between “a small levy or total darkness.” For the People’s Forum, it is a choice between “economic survival or state-induced poverty.”

    Parliament is expected to deliberate on the energy sector’s financial requirements in the coming weeks, a session that is likely to be met with further protests at the gates of the house.

     

     

  • Energy sector shortfall persists …IMF warns of ballooning costs amid privatisation option

    Energy sector shortfall persists …IMF warns of ballooning costs amid privatisation option

    Ghana’s energy sector shortfall is projected to balloon to US$1.10 billion in 2026, despite marked improvements, the International Monetary Fund (IMF) has warned.

    During the review period, the shortfall was over US$500 million, as assumed by the government through legacy debt payments or fuel purchases.

    “The smaller budgeted shortfall is justified by the 2025 outturn, as well as the expected reduction in power generation costs from renegotiated PPAs and projected decreased reliance on costly liquid fuels,” the IMF said in its Staff Report on Ghana.

    The IMF projects an energy sector shortfall of US$1.103 billion in 2026, comprising a US$925 million power sector shortfall and US$178 million gas sector shortfall. Revenue to be collected is projected at US$2.607 billion, whilst generation costs are estimated at US$3.53 billion.

    “The government and IPPs have agreed to restructure their legacy debt,” the IMF noted. “In 2025’s Q3, the government agreed with nine IPPs on a comprehensive payment plan for legacy arrears accumulated up to end-June 2025, including substantial haircuts (15 to 30%), significant upfront payments (around $300 million in 2025), and biannual payments for the remainder between 2026 and 2029.”

    The IMF also revealed plans to privatise the Electricity Company of Ghana (ECG), stating that “by the end of 2025, a transaction advisor is expected to be hired to oversee the selection process for private sector concessionaires for electricity distribution.”

    ECG’s payments to independent power producers (IPPs) have increased significantly, reaching $308 million in the first half of 2025, compared with $325 million for 2024 in total. The IMF urged more action to restore ECG to financial sustainability and reduce fiscal risks in the sector.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

  • Benchmark oil production pegged at 127k barrels/day at price of US$74.70/barrel

    Ghana’s offshore oil production is projected to average 127,000 barrels per day in 2025, contributing significantly to national revenue.

     

     

    Adnan Adams Mohammed

     

     

    Ghana’s benchmark crude oil production for this year has been projected at an average of 126,994.49 barrels of crude oil per day (approximately 127,000) translating to an annual output of 46.35 million barrels.

     

    These were arrived at based on a three-year simple average of each producing field’s actual and projected outputs in line with the Petroleum Revenue Management Act (PRMA) as announced by the finance minister in Parliament, last week, in accordance with the First Schedule (Section 17) of the PRMA (Act 815) as amended.

     

    The Benchmark price for 2025 has been calculated as a seven-year moving average of prices at US$74.70 per barrel for crude oil and the Gas price is projected at US$7.11 per MMBtu. These are expected to yield projected petroleum receipts of US$1,011.36 million for 2025

     

    “Mr Speaker, the Benchmark Revenue for 2025, which is the total petroleum receipts, net of the programmed receipts for GNPC is estimated at US$818.69 million”, Dr Cassiel Ato Forson noted when presenting the 2025 budget statement.

     

    “Of this amount, a total of US$573.08 million representing 70% of the Benchmark Revenue has been allocated to the Annual Budget Funding Amount (ABFA), while the Ghana Petroleum Funds (GPFs) are programmed to receive US$245.61million.”

     

    The GPFs receipts are would be distributed between the Ghana Stabilization Fund

    (US$171.93 million) and Ghana Heritage Fund (US$73.68 million) in the ratio

    of 70% to 30% in line with the PRMA.

     

    The total receipt was calculated as per Ghana group share (liftings) of the total Benchmark crude oil output projection (46.35 million barrels) of 9.20 million barrels consisting of: royalty volume of 2.56 million barrels; and carried and participating interest volume of 6.64 million barrels, whilst, the Benchmark gas output, has been estimated at 118.14 trillion btu for 2025.

     

    In monetary value terms, Ghana’s share of liftings are made up of Royalties (US$191.52 million), Carried and Participating Interest (US$495.92 million), Corporate Income Tax (US$319.70 million) and Surface Rentals (US$4.22 million).

     

    Of the total receipts of US$1,011.36 million, US$192.67million has been programmed for the National Oil Company (GNPC) in respect of the equity financing cost (US$139.15 million) and share of the net Carried and Participating Interest (US$53.52 million)

     

    Meanwhile, in the medium-term, total petroleum receipts are projected at US$1,159.66 million, US$1,209.33 million, and US$1,232.25 million, for, 2026, 2027, and 2028, respectively. This is based on Benchmark price per barrel of US$78.98, US$79.21 and US$75.50 for 2026, 2027, and 2028, respectively.

     

    The Government maintained the cap on the Ghana Stabilization Fund at US$100 million, in line with Section 23(3) of the PRMA.

     

  • Petroleum Hub Devt in limbo as host community makes demands before project starts

     

    Petroleum refinery

     

     

     

    Adnan Adams Mohammed

     

     

    The multi-billion dollar Petroleum Hub project to be sited in Nzema area in the Western region is faced with a stiff standoff by the host community.

     

    The host community, through the Coalition of Concerned Nzema People, has raised neglect concerns and is thereby making major demands before allocating the lands needed for the project.

     

    The coalition insists that their stance is not anti-development. They acknowledge the economic and social value of the land, which has historically provided substantial benefits through coconut plantations, cash crops, and other resources. The land also holds significant mineral deposits, including gold, clinker, and crude oil.

     

    The statement signed by representatives of the Coalition last week, on Tuesday, June 25, 2024, indicated that they are determined to protect their land and ensure that any development project benefits their community equitably and sustainably. They argue that, the land and its owners often become an afterthought in large-scale development projects, emphasizing that the land should be the most critical and costly consideration. The coalition has therefore outlined specific conditions that must be met before any land is allocated for the Petroleum Hub or similar projects including: Generational Compensation; and the land will neither be sold nor compulsorily acquired by the government.

     

    “It can only be leased with provisions for generational compensation”, the coalition insisted while listing other demands.

     

    One relates to Equity Interest whereby the community demands at least 25% of the investment value as equity, ensuring that the landowners benefit directly from the project.

     

    Another is Phased Land Acquisition: To prevent land grabs without actual development, the coalition proposes starting with just 5,000 acres in the first phase. Further land allocation would depend on the successful completion of this initial phase.

     

    Yet another concerns amenities.  Given the risks associated with such a large project, the coalition demands the provision of essential amenities, including roads, hospitals, and training facilities, to help the local population take advantage of the opportunities provided by the Hub.

     

    The coalition also calls for a 30% job quota for the core affected communities to prevent local residents from being disadvantaged due to rising living costs associated with the project.

     

    They also demand a quota in senior leadership positions to ensure continuous local representation in the decision-making processes.

     

    Furthermore, highlighting the environmental beauty of the region, the coalition insists on concrete measures to protect rivers, streams, the sea, plantations, and forests from potential oil spills and other environmental hazards.

     

    The coalition praised the efforts of their leaders but firmly stated that no land would be allocated for the Petroleum Hub until these demands are integrated into any agreements.

     

    The first phase of the project being done under the auspices of the Petroleum Hub Development Corporation (PHDC), aims at creating numerous jobs and providing a significant boost to local employment and the national economy, is set to begin as soon as it secures US$12 billion in requisite funding.

     

    The Corporation which is a private led initiative aims to increase Ghana’s Gross Domestic Product by 70 percent by 2036. This is expected to generate substantial tax revenue while supporting the country’s vision of self-sufficiency and industrialization.

     

    PHDC officially signed a US$12 billion agreement with TCP-UIC Consortium last week. The Consortium comprises of Touchstone Capital Group Holdings Ltd., UIC Energy Ghana Ltd., China Wuhan Engineering Co. Ltd., and China Construction Third Engineering Bureau Co. Ltd.

     

    “This project is a testament to our commitment to industrializing Ghana and creating sustainable jobs for our people”, the Minister of Energy Dr. Matthew Opoku Prempeh said during the signing ceremony.

     

    The CEO of PHDC, Charles Owusu, expressed optimism about the collaboration with TCP-UIC Consortium, highlighting their expertise and crucial role in the project’s success.

     

    The ‘Petroleum Hub’ covering over 20,000 acres of land in the Jomoro Municipal Area in the Western Region, is a US$60 billion investment in total and is aimed at revolutionizing Ghana’s energy sector and boosting its economy.

     

    The key infrastructure includes three refineries, five petrochemical plants, 10 million cubic metre storage facilities, jetties and port infrastructure.

     

    The first phase of the project, a cornerstone of Ghana’s industrialization strategy, will focus on establishing critical infrastructure, including the first refinery. With a capacity of 300,000 barrels per day (bpd), this refinery will significantly enhance Ghana’s ability to process crude oil domestically.

     

    It will also include a petrochemical plant which will convert petroleum byproducts into valuable chemicals used in various industries, ranging from plastics to fertilizers.

     

    Also there will be construction of storage tanks with a capacity of 3 million cubic meters to ensure a steady supply and efficient distribution of petroleum products.

     

    There are also plans to develop an oil jetty and port infrastructure to facilitate seamless import and export activities.

     

    Ancillary Infrastructure: Including pipelines, power plants, and a cutting-edge laboratory for product testing are also planned.

     

    The hub’s strategic location is poised to make Ghana a pivotal player in the West African petroleum market. The hub will leverage Ghana’s stable political climate, strategic geographic position, and attractive investment incentives to draw further investments and foster economic growth.

     

    The Petroleum Hub Project is to be developed in three phases over the next 12 years.