Market Overview Study Wind Energy Sector of Ghana

for

and

6th June 2016

Executive Summary

The client of CH Business Consulting, CJR Wind - a leading global wind power

Engineering, Procurement and Construction company, is interested in the

Ghanaian wind energy market and potential investment opportunities within the

sector.

CJR Wind, therefore, requires a well-structured in-depth Market Overview Study

introducing the Ghanaian wind energy sector and the investment environment

with the focus on regulation, current project, wind resource data, estimated

investment requirements, etc., in order to assess the feasibility of an investment

into a utility-scale wind power plant project.

This study provides a full overview of the sector and therefore assist CJR’s

investment decision.

Contents

Executive Summary ......................................................................................................................... 2

1. Introduction ............................................................................................................................. 5

2. Introduction to the Energy Sector ........................................................................................... 5

2.1. Source of the Ghanaian Electricity ................................................................................... 6

2.2. The Renewable Energy Sector - Strategic Goals and Directions ...................................... 6

2.2.1. Renewable Energy Act .............................................................................................. 7

2.3. Public Institutions ............................................................................................................. 8

2.3.1. Ministry of Power ..................................................................................................... 8

2.3.2. Energy Commission (EC) .......................................................................................... 8

2.3.3. Public Utilities and Regulatory Commission (PURC) ................................................ 9

2.3.4. Volta River Authority (VRA) ..................................................................................... 9

2.3.5. Electricity Company Ghana (ECG) ............................................................................ 9

2.3.6. Northern Electricity Distribution Company (NEDCo) ............................................... 9

2.3.7. Ghana Grid Company (GridCo) ................................................................................ 9

2.3.8. Other Regulatory Institutions ................................................................................... 9

2.4. Electricity Prices ............................................................................................................. 10

2.4.1. Wholesale Wind Energy Prices ............................................................................... 10

2.5. National Interconnected Transmission System ............................................................. 10

3. Wind Energy Sector ............................................................................................................... 11

3.1. Ghanaian Wind Market Overview .................................................................................. 11

3.2. Wind Resource Data Assessments ................................................................................. 11

3.2.1. Update of the Wind Energy Resource .................................................................... 13

3.3. Offshore Wind Potential ................................................................................................ 14

3.4. Limiting Factors .............................................................................................................. 14

3.5. Industrial Association ..................................................................................................... 14

4. Current Projects ..................................................................................................................... 15

4.1. Upwind International AG ............................................................................................... 15

4.1.1. Consortium members ............................................................................................. 15

4.1.2. Investors and Partners ............................................................................................ 15

4.1.3. Planned projects ..................................................................................................... 16

4.2. Other Planned Projects .................................................................................................. 20

4.2.1. Future Plans of the Volta River Authority ............................................................... 20

4.2.2. EBB Volta Eolica Ghana Ltd (100 MW) .................................................................... 21

4.2.3. Kalahari Investments Limited (150 MW) ................................................................ 21

4.2.4. ElecQtra (West Africa) Limited (50 MW) ................................................................ 22

4.3. Other Companies ........................................................................................................... 22

4.3.1. Ghana Wind Power Ltd ........................................................................................... 22

4.3.2. China Wind Power .................................................................................................. 22

4.4. Off-grid systems ............................................................................................................. 22

5. Suggestions – Reasonable Project for Ghana ........................................................................ 23

6. Project Execution - Steps and Estimated Costs of Registration ............................................ 24

6.1. Estimated Costs of Registration ..................................................................................... 25

7. Conclusion ............................................................................................................................. 26

1. Introduction

Ghana is one of Africa’s and the world’s fastest developing country. In 2011 the

GDP growth reached 13.5%, which was the highest in the world. This Western

African nation is famous for its political stability and the peaceful and friendly

demeanour of its citizens. Currently, 52% of its 24.5 million population lives in the

cities and their agglomeration. Accra, the capital of Ghana, can be found on the

coast, with about 3.5 million inhabitants.

The country’s southern region is more densely populated with rainforests, while

the northern regions are more scarcely populated with dryer savannah covered

territories.

As a result of the continuous economic and population growth, the country’s

energy need is rapidly increasing as well. The energy infrastructure, both on

production and transportation side, is under-developed that offers great

opportunities for investment. The government and the public institutions have

realised that they cannot tackle the energy deficit alone. For this reason, policies,

legislation and special directives were put in place to support the foreign capital

inflow into the sector.

Ghana is a member of the ECOWAS (Economic Community of West African

States), which is the West African region’s economic organisation, similar to EU.

The total population of ECOWAS is about 340 million and it comprises 15

countries. Ghana has both economically, politically and geographically a central

role in this organisation.

2. Introduction to the Energy Sector

About 66% of Ghana’s population has access to electricity. At the northern part of the country,

this is only 36%. The majority of Ghana’s energy sector, the electricity production, transportation

and sales/marketing, is controlled by state institutions. These are divided according to their

functions.

The biggest electricity producer is the Volta River Authority (VRA) whose main source of

production is the hydro power plant on the Volta river established 50 years ago providing 28%

of the total generation capacity of the country. Over the years, the activities of the organisation

have been expanded and currently it oversees all the electricity production in the country. The

VRA produces 66.7% of Ghana’s electricity. Of the remaining 33.3%, 22.4% is produced by

Independent Power Producer (IPP) and 10.9% by the Bui hydro plant, which is also owned and

controlled by the state. Since 2013 and 2015, 0.6% of the country’s total capacity is generated

from solar power.

In an effort to increase the production capacity through private capital inflows, the IPP system

has been developed in the mid-2000s. This was in line with the energy sector’s privatization

agenda. The IPPs are allowed to build, operate and control these power plants. Therefore, the

distinction is made between the “regulated market” which allows private parties to initiate and

develop renewable energy projects as Independent Power Producers and utility-led project

development of the VRA.

2.1. Source of the Ghanaian Electricity

Source Share (%) Installed capacity (MW)

Hydro

VRA Hydro 32.3 1 180

Bui Hydro 10.9 400

Sub-total 43.2 1 580

Thermal

VRA Thermal 34.3 1 252

IPP Thermal 21.9 801

Sub-total 56.2 2 053

Renewables

VRA Solar 0.1 2.5

IPP Solar 0.5 20

Sub-total 0.6 22.5

TOTAL 3 655.5

The table above shows Ghana’s sources of electricity with a total 3655.5 MW capacity from

hydro, thermal and solar energy.

The thermal plants use natural gas, crude oil and other petroleum products as fuel for their

operations. Even though the country began its own crude oil production from its offshore

reserves, it still has to rely on petroleum imports from Nigeria and other countries. Supply has

been fluctuating and unreliable as experienced in recent years. Further the hydro plants’ water

level fluctuation during severe droughts, for example in 2006-2007, cause problems in the

electricity production. These manifest in constant country-wide electricity fluctuation, load

shedding and blackouts. For example, 2014-2015 has been the worst in terms of load shedding

and country-wide blackouts.

The Ghanaian authorities wish to diversify the sources of production to deal with this problem

and to achieve stable electricity supply in the upcoming years. It plans to concentrate on the

renewable energy sources, among others on the wind and solar power, as an alternative.

2.2. The Renewable Energy Sector - Strategic Goals and Directions

The government’s key strategic objective is to increase the country’s electricity production

capacity to 5000 MW by 2016. The policy also sets the target for total electricity generated from

renewable resources to 10% of by 2020. This number doesn’t include hydro energy. The first

solar power plant was commissioned on the 9 May 2013 at Navrongo in the northern part of

Ghana, with a capacity of 2.5MW, whilst physical construction has been completed and the final

commissioning tests are ongoing of the second 20 MW solar power plant.

Ghana’s population, economy and industrial development are rapidly expanding as well as its

energy needs. The official figures show that the country’s electricity demand increases by 10%

annually. Taking into consideration the 2016 targets, Ghana will require at least 7000-7500MW

electricity by 2020. Additionally, Ghana would like to become a net electricity exporter in the

West African region, which its central location makes it perfect for.

Although some early installations and projects are operational, both the solar and wind energy

sectors are in very early stages of development. Looking at the current 22.5 MW production

capacity from the solar power plants, there is a lot of room for expansion on the market. The

state cannot handle the ever increasing energy demand, so it welcomes private investment into

the sector. Policies, regulations and incentives have been put in place to create an enabling

environment and motivate renewable energy investments. The government has been reducing

subsidies on electricity by raising tariffs, which, although bad for consumers, higher electricity

tariffs can boost private investments in power generation.

Priority Areas for Renewable Energy Investments (Grid Connected) by the Government of

Ghana by 2020:

Utility-Scale Wind park

Utility-Scale Solar Farms

Distributed grid-connected renewable energy generation through Net-Metering (solar,

wind, biomass, hydro)

Renewable Energy legislation in Ghana is ruled by the Energy Commission Act of 1997, the Public

Utilities Regulatory Commission Act and Renewable Energy Act.

2.2.1. Renewable Energy Act

Ghana’s commitment is well represented by the Renewable Energy Act, 2011 (Act 832) passed

in 2011, which gives a framework to the sector. It contains multiple incentives, regulation and

strategy that aim to open up the industry and creating a desirable environment for private

entities.

Key provisions of the Act:

’Feed-in-tariff’ scheme – under which electricity generated from renewable energy

sources by the private sector would be offered a guaranteed price to ensure that IPPs

get paid appreciably higher than what it costs to generate power.

’Purchase obligation’ – under which power distribution utilities and bulk electricity

consumers would be obliged to purchase a certain percentage of their energy from

electricity generated from renewable energy sources

’Off-grid Electrification’ – promote mini-grid and stand-alone renewable energy

systems for remote off-grid locations

‘Licensing regime’ – for commercial renewable energy service providers among others

to ensure transparency of operation in the renewable energy industry

The exemption from import duty and tax-free importation of renewable energy

technologies

Incentives to compensate for the large initial capital investment

Development of codes and standards for solar, wind and bio- energy systems

Regulations and procedures to ensure that all renewable energy service providers are

provided with licenses/permits and Power Purchase Agreements

The act can be downloaded from the following link -

http://www.energycom.gov.gh/files/RENEWABLE%20ENERGY%20ACT%202011%20(ACT%2

0832).pdf

2.3. Public Institutions

The following state institutions and agencies responsible for the sector:

2.3.1. Ministry of Power

http://www.energymin.gov.gh/

The Ministry is responsible for creating, overseeing, regulating, executing and

evaluating the strategy and policy in order to satisfy the country’s energy needs.

2.3.2. Energy Commission (EC)

http://energycom.gov.gh/

The Commission is a technical and regulatory body responsible for the electricity, natural gas and

renewable energy sectors. Its functions are the regulate, administrate, develop and control the

utilization of the Ghanaian energy resources. It is responsible for the involvement of the private

sector and to prepare and update national energy plans. The EC is the final statutory body

required to issue licenses for renewable energy businesses in Ghana.

2.3.3. Public Utilities and Regulatory Commission (PURC)

http://www.purc.com.gh/

PURC regulates and oversees the utilities companies’ (electricity and

water) activities. It is mainly responsible for defining the supplier and user prices. It has the

responsibility of striking a delicate balance – ensuring that private sector developers have

adequate financial incentive to invest into power projects while at the same time, not subsidizing

the sector beyond the capacity of the government. It has the mandate to set tariffs for consumers

and producers (Feed-in Tariffs for delivery of electricity to the grid) and to balance the interests

of producers and consumers alike.

2.3.4. Volta River Authority (VRA) http://vraghana.com/

VRA’s main task is to generate and supply the electricity for bulk commercial buyers.

2.3.5. Electricity Company Ghana (ECG) http://www.ecgonline.info/

ECG is the main buyer of electricity produced in Ghana and is responsible for

distributing it to the end users. ECG is primarily responsible for the energy needs

of the southern part of Ghana.

2.3.6. Northern Electricity Distribution Company (NEDCo) http://www.nedco.com.gh/

Its function is the same as ECG’s, but it is responsible for the northern part of the country, which

is geographically about 64% of Ghana. The density of the population is very low in these regions

and the areas supplied by electricity are only about 36%.

2.3.7. Ghana Grid Company (GridCo) http://www.gridcogh.com/

GridCo is responsible for the transportation of the electricity generated by the producers (VRA,

IPPs etc.) to the bulk buyers that comprise of ECG, NEDCo and the mines.

2.3.8. Other Regulatory Institutions

The Environmental Protection Agency (EPA) and Ghana Standards Authority

(GSA), which respectively issue environmental permits and certification for

equipment for importation and distribution in Ghana.

Specific ventures also require approval from the local regulatory bodies such as the

Local District and Metropolitan Assemblies.

2.4. Electricity Prices

The following are the electricity prices for the end users. The significant reduction of the state

subsidies on utilities resulted a more competitive electricity prices for the IPPs.

The following table is effective 14th December 2015. Rates are calculated at the exchange rate

on the 1st June 2016 (GH₵1=0.2569).

Residential (kWh) USD/kWh

0 – 50 0.0862

51 – 300 0.1729

301 – 600 0.2244

601+ 0.2494

Non-residential (kWh) USD/kWh

0 – 300 0.2486

301 – 600 0.2646

601+ 0.4174

Mines

Fixed price 0.2928

2.4.1. Wholesale Wind Energy Prices

Defined by the ’Feed-in-tariff’ scheme, effective from 1st October 2014, the state buys electricity

generated by wind energy systems at a price of USD 0.1321/kWh without and for USD

0.1432/kWh with grid stability/storage system. Rates are calculated at the exchange rate on the

1st June 2016 (GH₵1=0.2569).

2.5. National Interconnected Transmission System

3. Wind Energy Sector

Wind energy is emerging as one of the most promising alternative sources of energy globally due

to its potential to meet rising demand for electricity at relatively cheaper costs compared to

other renewables.

3.1. Ghanaian Wind Market Overview

The potential and possibilities have also been recognized in Ghana. The favourable Ghanaian

environment (geographical, investment, political, economic, security and tax system) and the

government’s priority towards the renewable energy sector resulted that a number of

companies are seeking to invest in the wind energy sector.

Currently, there is no large grid-connected wind energy plant in Ghana except for small off-grid

ones installed for demonstration purposes but there are several attempts to establish utility-

scale wind power plants in the country.

3.2. Wind Resource Data Assessments

Based on information gathered from the Energy Commission, the Ghana Meteorological Agency

and various studies that include the United Nations Environment Program (UNEP) sponsored

‘SWERA – Solar and Wind Energy Resource Assessment’ study conducted by the US institution

National Renewable Energy Lab (NREL) between 2002-2005, about the on- and off-shore wind

power potential of Ghana, it is concluded that the country holds significant potential for wind

power generation. The coastal regions, ideal areas being between the Central and Volta regions

of Ghana towards the Ghana/Togo border, as well as scattered areas throughout the country are

all suitable for grid-connected large wind farms with stand-alone wind turbines.

Of the 6 Wind classes, (with Class 6 being the highest wind resource potential and Class 1 being

the lowest), Ghana has Class 4-6 wind resources at the highest ridges near the border with

Togo and the highest ridges north-west of Accra. This means that there is approximately 413 km2

area with good-to-excellent (Class 4-6) wind resource which could support just over 2,000 MW

of wind power, and if moderate-to-excellent wind resources were included, that could go up to

5,640 MW. Along the Ghana/Togo border 9.0-9.9 m/sec wind speed is recorded that can yield a

wind power density of 600-800 Watt/m2 in the mountains with the total wind energy potential

of this area is estimated at around 300 MW capacity or 800 GWh electricity. Also, along the coast

over a large area, 6.2-7.1 m/sec wind speed is recorded at the height of 50 m.

Wind map of Ghana showing areas with high potential

The NREL map for Ghana shows wind speeds between 6.2 and 7.1 m/sec for the coasts of Central,

Greater Accra and Volta regions and 7.1 and 9.9 m/sec in the mountainous parts of the Eastern

and Volta regions.

Ghana – Wind Electricity Potential

Source: SWERA Report - Ghana Wind Resource Summary

Monthly average wind speeds for coastal Ghana; between Lat. 5o–6oN and Long.00-10E

Sensor Height (m/s) July Aug Sept Oct Nov Dec

12 metres 4.56 5.41 5.49 6.36 5.08 4.74

40 metres 5.41 6.31 6.54 7.54 6.02 5.18

Satellite (NREL) 5.4 – 6.0 4.6 – 5.2 4.8 – 5.3 4.5 – 5.0 3.5 – 3.7 3.6 – 4.2

Source: Energy Commission, NREL - Satellite Ocean Wind Measurement

3.2.1. Update of the Wind Energy Resource

The wind energy resource is continuously updated and measurements are being conducted using

very modern equipment and technologies at selected sites in the coastal areas of Ghana. Five

meteorological masts of 60 m height (NRG 60 m XHD wind mast), measuring the wind conditions,

were installed at five wind resource sites along the coast in 2011 at Ningo in the Greater Accra

Region, Ekumfi Edumafa and Gomoa Fetteh in the Central Region, and Avata and Atiteti in the

Volta Region.

The analysis of the data confirms the SWERA findings, that good-to-excellent wind resource

(wind class 4 ̶6) which could support a little over 2,000 MW of wind power development, and if

moderate-to-excellent wind resources were included, that could go up to 5,640 MW.

Obtained wind-speed measurements

3.3. Offshore Wind Potential

Increased wind speed and reduced wind turbulence offshore are much more appreciated now,

and this, in conjunction with more cost-effective infrastructure has reduced the predicted cost

of energy from offshore projects. The Ghanaian offshore has a considerable high potential for

wind energy as demonstrated by the SWERA study.

3.4. Limiting Factors

In Ghana, due to various legal, social and infrastructure characteristics limiting factors can be

land-use restrictions and land title acquisitions, how far the wind resource is from the existing

national power grid and general road accessibility of the location.

3.5. Industrial Association

As a result of the relative infancy of the wind power sector and lack of executed commercial

sized project in Ghana, there is no industrial association specifically for wind companies at the

moment unlike for solar, the Association of Ghana Solar Industries, which is an industrial

chamber and pressure group for the solar industry.

4. Current Projects

Currently, Upwind International AG is the only company with major ongoing development at

an advanced stage, while there are several other projects in the planning phase, but

investment decisions have not been taken yet.

4.1. Upwind International AG

Upwind International AG is a Swiss Holding Company with the purpose of

planning and developing wind energy projects worldwide concentrating

mainly on Africa and Eastern Europe. The main shareholder is the Swiss NEK

Umwelttechnik AG that plans, engineers, develops and manages the projects.

Upwind establishes in each country of their operation specific project companies that hold all

the assets of each project. In Ghana, Upwind Ayitepa Ltd., Upwind Prampram Ltd., Upwind

Amlakpo Ltd. etc. are these project companies. The companies, however, only develop the

projects, they do not implement, own or operate them. Once they have reached all required

permits for their implementation Upwind hand-overs the projects to investors and/or operators.

The financial means required to develop the projects are provided by own resources, after which,

they sell their projects to interested third parties (investors and/or operators) at a specific time.

4.1.1. Consortium members

4.1.1.1. NEK Umwelttechnik AG

NEK Umwelttechnik AG is an independent renewable energy engineering and

planning company that is headquartered in Switzerland. NEK has achieved

large successes of wind parks developments in Romania and Spain and has

been seriously looking at wind power in Ghana since 1999.

NEK has partnered with Accra-based Atlantic International Holding Company and set up NEK

Ghana Ltd. in 2003, specialising in wind energy technology, acting as a consultant to

organizations, investors and operators and for developing utility-scale wind power project. The

company announced developing of the 225 MW Ayitepa wind farm in 2014, located 40

kilometres from Accra on the east coast of Ghana with a total value of USD525 million.

4.1.1.2. Atlantic International Holding Co.

The Atlantic Group is a diverse organization with expertise

across four business sectors - Power Transmission and

Distribution, Air Conditioning and Ventilation, IT Solutions and Services and Office Furniture.

Atlantic International Holding Company is a 30% shareholder in NEK Ghana Ltd.

4.1.2. Investors and Partners

4.1.2.1. Mainstream Renewable Power

Mainstream Renewable Power acquired the Ayitepa wind

farm project in September 2014 from Upwind International.

Mainstream is an independent developer and operator of renewable energy projects. With a

development pipeline of over 17,000 megawatts globally, it is currently operating and

constructing wind and solar farms across Ireland, South Africa, Chile and Canada. Mainstream is

also developing just under 8 GW of offshore wind projects in England, Scotland and Germany

with 4.45 GW of secured grid connections for these offshore projects.

4.1.2.2. Actis

Actis announced in 2015 that it launched together with Mainstream

Renewable Power a $ 1.9 billion Pan-African renewable energy platform called Lekela Power.

Lekela Power will provide between 700 and 900 MW of wind and solar power in Africa, including

the 225 MW Ayitepa wind project in Ghana.

4.1.2.3. Lekela Power

Lekela Power is a joint venture partnership between Mainstream

Renewable Power and Actis and is headed by Chris Antonopoulos formerly of ABB Energy

Ventures and Bombardier. The company’s office is based in London.

Lekela’s project pipeline comprises, among others: 360 MW of wind projects in South Africa; the

225 MW Ayitepa wind project in Ghana and 100 MW of wind and solar PV projects in Egypt.

4.1.3. Planned projects

Upwind International has multiple projects, 6 in total, at various stages of development and

though they haven’t begun construction yet, their efforts are in a very advanced stage. Its

respective project companies in Ghana have reached, currently negotiating and/or finalizing

agreements with the public stakeholders for the execution of the projects that include ‘Power

Purchase Agreement’ with the Electricity Company of Ghana (ECG) based on the Renewable

Energy Act and the approved Feed-in-Tariff for wind projects by the Public Utilities Regulatory

Commission (PURC), Environmental Permit from the Environmental Protection Agency (EPA),

Construction Permits from the District Assemblies, ‘Provisional Generation and Wholesale Supply

Licence’ form the Energy Commission, and Connection Agreement with GRIDCo.

Locations of the 6 planned projects

4.1.3.1. Upwind Ayitepa (225 MW)

Location: Prampram - Ningo District, Greater Accra Region

The development of the Ayitepa Wind Farm was initiated in 2012. Construction will start soon,

and it is projected that it will start production in the first half of 2017. Lekela Power will finance,

construct and operate the wind farm and the solar parks. The Ayitepa Wind Farm will be

constructed in phases, initially, 150MW capacity which will later be increased by 75MW through

the phase II. The project site is located in the Ningo-Prampram District, around 50 - 60 km east

of Accra, over an area of approximately 15,000 acres.

The following permits for the implementation of this project were received so far:

Provisional Generation and Wholesale Supply Licence from the Energy Commission

No objection from the District Assembly Ningo-Prampram

The Final Environmental Permit from the Ghana Environmental Protection Agency

Siting Permit from the Energy Commission

The Final Construction Work Permit from the District Assembly

The Siting Clearance from the Energy Commission

Grid Connection Agreement regarding access to the 330 kV WAPP with GRIDCo (the first

Connection Agreement to be signed in Ghana for a renewable energy project)

The Final Construction Permit from the Energy Commission

Signed PPA with the Electricity Company of Ghana for 20 years and a two-phased

implementation (150 + 75 MW)

The Ayitepa Wind Farm will have a capacity of up to 225 MW and will supply more than 600,000

MWh of electricity. Based on inputs coming from the Ghanaian Authorities, the wind farm will

be accompanied with two 20 MW solar parks, together forming the first Hybrid Power Plant in

Africa. The further development work for these projects is ongoing in order to get them also fully

permitted by beginning of 2017.

4.1.3.2. Upwind Prampram (86 MW)

Location: Prampram - Ningo District, Greater Accra Region

The project development of the Prampram Wind Farm already started in 1998, when the first

meteorological masts were installed. The project was initially planned as a 5 MW pilot project

but currently is planned as 86 MW with an annual supply of up to 200,000 MWh of electricity.

The project is located about 30 km east of Accra, over a total area of approximately 3,000 acres.

It is scheduled that construction of this project will commence in 2017.

4.1.3.3. Upwind Akplabnya (50 MW)

Location: Ada West District, Greater Accra Region

The project was initiated in 2012 and is located in the Ada West District, around 70 - 75 km east

of Accra, and will be constructed over an area of about 3,000 acres. The Akplabnya Wind Farm

will have a capacity of up to 60 MW and supply around 100,000 MWh of electricity annually. The

start of construction is scheduled for 2017.

4.1.3.4. Upwind Amlakpo (140 MW)

Location: Amlapko, Ada West District, Greater Accra Region

The project was initiated in 2012 and is located about 80 - 85 km east of Accra on an area of

approximately 8,000 acres. The Amlakpo Wind Farm will have a capacity of up to 140 MW and

will supply around 300,000 MWh electricity annually. It is scheduled that construction of the first

phase of this project will commence in 2018.

4.1.3.5. Upwind Koluedor (100 MW)

The project is located about 70 – 75 km east of Accra on an area of approximately 5,000 acres.

The Koluedor Wind Farm will have a capacity of up to 100 MW and will supply around 200,000

MWh electricity annually. It is scheduled that construction of the first phase of this project will

commence in 2018.

4.1.3.6. Upwind Konikablo (150 MW)

The project is located about 60 - 70 km east of Accra on an area of approximately 10,000 acres.

The Konikablo Wind Farm will have a capacity of up to 150 MW and will supply around 300,000

MWh electricity annually. It is scheduled that construction of the first phase of this project will

commence in 2017.

4.2. Other Planned Projects

4.2.1. Future Plans of the Volta River Authority

• Wind and Solar power project development in accordance with the Kyoto Protocol’s

Clean Development Mechanism (CDM)

• EPC contracts and agreements (Engineering, Procurement, Construction)

As part of measures to boost power supply in the country, the Volta River Authority is planning

to establish several wind farms around the Volta delta. VRA intends to build a wind power plant

as a joint venture with a foreign partner with wind farm experience. Currently, Vestas

Mediterranean and Elsewedy, have been identified who are working with VRA to undertake the

wind measurement after which the project could be developed. Expected completion in 2019.

4.2.1.1. WPP1 (75MW)

Location: Anloga and Anyanui, Volta Region

4.2.1.2. WPP2 (75MW)

Location: Wokumagbe and Goi, Greater Accra Region

4.2.2. EBB Volta Eolica Ghana Ltd (100 MW)

Location: Sege, Greater Accra Region

Acquired provisional Power Generating License from the Energy Commission

4.2.3. Kalahari Investments Limited (150 MW)

Location: Gyengyenadze, Winneba, Central Region

Acquired provisional Power Generating License from the Energy Commission

4.2.4. ElecQtra (West Africa) Limited (50 MW)

Location: Afiadenyingba, Volta region

Acquired provisional Power Generating License from the Energy Commission

4.3. Other Companies

4.3.1. Ghana Wind Power Ltd

The company has been established by Renewable Energy Group Ltd, Estonia, and Ghanaian

partners in 2010 as a developer of large wind farms in Ghana and West Africa. Ghana Wind Power

wind farms are intended to be financed, built and operated with international partners but there

is no update on recent developments of the company.

4.3.2. China Wind Power

China Wind Power is considering 2 projects with capacity to up to 50 MW. The company intends

to undertake wind measurements at four coastal sites and four inland sites to determine

feasibility. Provided that the wind speed proves to be adequate, these sites might be developed.

4.4. Off-grid systems

There is no large-scale off-grid system in the country so far. A few smaller independent

installations have been made, like electric turbines and wind water pumping for demonstration

purposes by NGOs and foundations that supply schools, hospitals, and private residences. They

are located in rural areas, where there is no central power supply since the area is not connected

to the national grid.

5. Suggestions – Reasonable Project for Ghana

Moving ahead, we recommend 2 ways of proceeding in order to execute a project in Ghana. Both

directions would definitely require a rigorous and exact measurements of the wind power speeds

at the chosen location. Locations along the coast seems to be generally more preferred by

companies but the mountainous inland locations with greater wind speeds should be also

considered.

A. Partnering with companies already present/active on the market for project development

Based on the information and the Ghanaian energy sector environment presented in this document and depending on the desired investment size of CJR Wind, it is possible to identify and form the suitable form of partnerships with the companies already active in the sector. Many of these companies have identified the location, and project development is ongoing but most certainly are open for joining forces for faster execution.

In many cases, financing is a major problem, and if CJR Wind can bring financing onboard, the largest barrier to entering the market is solved.

B. Completely new project development at a new location – for example at Mankwadze or

other mountainous locations inland

Based on preliminary wind speed measurements and studies there are still a number of

unused locations with wind power potential.

A study, for example, using RETScreen Assessment based on historical wind speed data have

determined that a 50MW grid-connected wind power plant is technically and financially

viable at Mankoadze in the Central Region. Mankoadze is a village in the Central region,

located at Latitude 5.20° N and Longitude 0.41° W. Monthly average wind speed data for

Mankoadze for the period of data collection (January 2001 to July 2002), shows the lowest

and highest mean wind speeds of 4.4 m/sec for January and 8.3 m/sec for April respectively

at 12 m above ground level, which would be much greater at higher altitudes.

Alternatively, the mountainous locations in the Eastern and Volta regions could be explored

as well, where recorded wind speeds are much higher.

6. Project Execution - Steps and Estimated Costs of Registration

1. Establish in Ghana

a. Company registration and licensing with the

i. Registrar-General Department – Limited Liability Company

ii. Ghana Investment Promotion Centre

iii. Ghana Revenue Authority

iv. Energy Commission – Acquisition of the Provisional License

b. Open bank account

c. Residence and Work permit - Ghana Immigration Services

d. Hire charted accountant and lawyer

2. Acquire licenses and permits before the construction a. Prepare Feasibility Studies, Conduct Geological Survey, Health, Safety and

Environmental Studies

b. Begin land acquisition process c. Licensing and permits with the local authorities

i. Energy Commission – Siting Clearance ii. Environmental Protection Agency

iii. Local Government - District Assemblies - Building permit iv. Town and Country Planning - TCPD Ordinance v. Ministry of Defence - National Security Permits

vi. Ministry of Roads and Highways – road construction permits vii. Ministry of Works, Housing and Water resources

3. Begin negotiations with the ECG, GridCo., and PURC (‘Grid Connection Agreement’, ‘Power Purchase Agreement’ and ‘Feed-in-Tariff’)

a. ECG due diligence process commences b. Signing of Memorandum of Understanding c. Stakeholder consultation for both investor and off-taker d. Inspection of Licenses (i.e. Provisional licenses from EC and EPA Site Clearance) e. Indicative pricing from PURC f. Submission of final report on project feasibility g. Negotiations on technical feasibility financial proposals and legal issues h. Power Purchase Agreement (PPA) negotiations

4. Acquisition of Construction Work Permit (Authorization to Construct) a. Acquire the Construction work permit from the Energy Commission b. Ghana Civil Aviation Authority – Airspace Safety Permit c. Ghana Fire Service – Preliminary Fire Safety Licence

5. Finalize the ‘Grid Connection Agreement’, ‘Power Purchase Agreement’ and the ‘Feed-in-Tariff’ contracts with the ECG, GridCo., and PURC

a. Initialling of draft Agreements b. Board approval c. Signing of Agreements d. Distribution of Signed PPAs to Relevant Stakeholders

6. Acquisition of the Operational Licence from the Energy Commission

a. Final Fire Safety Licence

7. Project closure

6.1. Estimated Costs of Registration

Company Registration

Registrar-General Company registration fee One-time fee € 400.00

0.5% of stated capital payable as duty Maximum € 2,200.00

Ghana Investment Promotion Centre

Registration fee Renewable € 2,500.00

Duty-free importation of equipment € 2,500.00

Energy Commission - Provisional Licence - Registration fee Renewable € 5,000.00

Ghana Revenue Authority – Registration fee One-time fee € 200.00

Ghana Immigration Service - Residence and Work permits Per applicant € 900.00

Prior to Construction

Siting Permit

Land registration One-time fee Currently Unknown

Environmental Protection Agency

Processing fee Renewable € 300.00

Licencing fee € 2,100.00

Local Government - Building permit One-time fee Currently Unknown

Country and Town Planning - TCPD Ordinance One-time fee Currently Unknown

Geological Survey One-time fee Currently Unknown

GridCo - Grid Study One-time fee Currently Unknown

Ministry of Defence - National Security Permits One-time fee Currently Unknown

Ministry of Roads and Highways – road construction permits Currently Unknown

Energy Commission - Siting Clearance - Licencing fee One-time fee € 9,500.00

Construction Permit

Public Utilities Regulatory Commission - ’Feed-in-Tariff’ One-time fee Currently Unknown

Ghana Civil Aviation Authority – Airspace Safety Permit Currently Unknown

Energy Commission - Construction Permit - Licencing fee One-time fee € 2,000.00

Post-Construction

Energy Commission - Operational Licence

Licencing fee One-time fee € 2,000.00

plus EUR 500 per MW One-time fee Currently Unknown

Fire Safety Licence Renewable Currently Unknown

7. Conclusion

Satisfying Ghana’s electricity demand is a major focus of the government in order to sustain the

rapid development. The residential and industrial needs are continuously growing and the state

is committed to increasing the supply by including new power resources into the energy mix. The

country is serious about increasing the capacity to reach 5000MW and to have 10% of the

electricity from renewable sources by 2020, and about 5% of total electric generation potential

from wind alone. In light of these plans, there are possibilities for power purchase agreements

as Ghana in the medium term, not only wishes to cater for its own needs, but for the

neighbouring countries’ as well.

Wind energy still remains widely untapped in Ghana despite the promising potential. Historical

ground wind speed measurements show potential for wind power generation in Ghana,

especially along the coastal areas, based on moderate annual mean wind speed figures

The Renewable Energy Act is in line with this policy and it creates the framework. It enables

private sector participation by providing a favourable environment. The state agencies (VRA,

ECG, PURC etc.) are all open for collaboration and are waiting for investors. These organisations

are willing to enter into agreements and provide lucrative incentives in order to reach their goals

and achieve their mandate.

The new legislation and the government’s commitment bring in many foreign investors into the

country and most of them are going to be integrated into the national grid by 2016-2017. These

projects are executed by self- or pre-financing and enjoy the state’s full support. The companies

usually purchase the land, where they wish to start their operations.

In most cases financing is a major problem, and if CJR Wind can bring financing onboard, the

largest barrier to entering the market is solved.

Moving ahead, we recommend 2 ways of proceeding in order to execute a project in Ghana. Both

directions would definitely require a rigorous and exact measurements of the wind power speeds

at the chosen location.