The year 2016 is steadily drawing to a close and so it is a good time to reflect on our achievements, challenges, and what we need to do to accomplish our corporate objectives in the coming year.
As an organisation, not only have we encountered a number of challenges in the year 2016 but also we have recorded some remarkable successes. Indeed, we have cause to thank the Lord for His goodness and divine blessings, and for seeing us through another successful year, in the face of daunting national austerity and global slump.
Looking back, we can conveniently part ourselves on the back for holding the power system together, after a debilitating load management programme which saw some companies, including some of our major customers and stakeholders, downsizing or shutting down their businesses completely.
Today, through hard work and collaboration from IPP's, we have excess generation which is good for the country. Nevertheless, the effect of the power crises on the entire country has dented our hard earned corporate image and reputation, which, I am certain, will take us quite some time and effort to recover fully.
Our challenges were mainly with the low water level in the Akosombo reservoir, inadequate supply of gas, the use of crude oil, and weak revenue collection, all contributing to the high operating cost, and thus worsening our already precarious financial position. Revenue collection was also impeded by rigid legal frameworks which adversely affected our cash flow so badly, that we had to apply stern measures to ensure we operated within budgetary provisions.
Notwithstanding these challenges, we successfully made some modest gains by completing and commissioning the 220MW simple–cycle Kpone Thermal Power Station (KTPS). The retrofitting of the Kpong Generating Station also continued steadily with the completion of Unit 2 to full service on August 12, 2016, and expected completion of the project in 2019.
The greatest news this year was that the Akosombo reservoir appreciated to an elevation of 253.01ft compared to 244.80ft last year. This brought some relief on the power system since hydro can then be relied on to compliment thermal generation. The Government of Ghana (GoG) through the Ministry of Finance has also instituted a programme to help us restructure our debt.
Gas supply to the Aboadze enclave from Ghana Gas Company Ltd. gave us temporary relief during the better part of the year, but the intermittent shutdowns interrupted the smooth operations at the station. Also, the Authority followed with keen interest the proposed emergency LNG Project in Tema by West African Gas Limited, and the Tema LNG Project by Quantum Power Ghana Gas. When completed, it will enable our idle plants (the Mines Reserve Plant (MRP), the Siemens Plant, KTTP and other IPPs) to be able to come on stream.
Renewable energy received a major boost with the signing of the 22.82 million Euros loan facility for construction of the 8MW and 4MW solar plants at Kaleo and Lawra, respectively, in the Upper West region. We are also in discussions with AfD and KFW for additional funding to increase our solar capacity to above 50MW in the short term to increase our footprint in renewables. Additionally, efforts to build a 100-150MW wind power stations in four locations in the coastal belt progressed steadily.
Growth and Expansion Programmes
We have secured Parliamentary approval and waiting for the sovereign guarantee from the Ministry of Finance to commence work on the 184MW T4 plant at Aboadze, in 2017.
Furthermore, discussions are also on-going for the repowering of the T3 plant at Aboadze. Whiles the conversion of the 220MW KTPP into combined cycle mode, and the commissioning of the 36MW Siemens (TT2PP) expansion project to make them more efficient remains our priority.
General Outlook and The way forward
The evolving power market and the growing oil and gas sector offer us rare opportunity for growth and expansion. Analysts perceive the proposed ECG concessionaire-arrangement will make ECG more efficient and, hopefully, enhance our revenue mobilization efforts. But, unless we take drastic measures to improve our service delivery, the entrance of IPPs into the power market is very likely to gradually erode VRA's dominance in the sector, and ultimately, leave VRA with a marginal market share of below 50% over the next five years.
Organizational Renewal and Growth
For these and other reasons, it is important for all of us to be committed to the organizational renewal efforts, aimed at repositioning VRA as relevant, efficient, and competent power utility. The Authority's Vision and Mission statements have therefore been reviewed, to reflect this desire of making VRA an international brand and benchmark power utility with the capacity to provide excellent power related services comparable to any company in the world. This is not only prudent but vital if VRA is to remain relevant, to attract and retain a reasonable market share in the sub-region.
To enable VRA focus on its core mandate and compete favourably in the deregulated energy market, Management is committed to transforming our non-power assets, including the VRA Academy, into standalone strategic business entities with the capacity to compete favorably in their areas of operation and be the preferred service provider. This is not only prudent but vital if VRA wants to offer competitively priced services, reliable power, and to retain/expand its market share.
It is my expectation that in the coming year, Management and Staff will collaborate closer on all fronts, especially, at this time that we have initiated a programme to form the VRA International company as a standalone subsidiary, to leverage our expertise and professional competencies for consultancy services in the sub region. Indeed, we will require dedicated, focused and a well-motivated workforce to deliver quality service to the expectations of our clients. In view of this, Management will continue to pursue best quality human resource management programmes, including staff rotations at all levels, skills and competency deployment, as well as promotion of staff wellbeing.
Once again, I entreat all staff to be cost-reduction-focused and revenue- improvement-driven, especially, in overtime claims and material usage, to improve our financial performance. It is my belief that with discipline, dedication, commitment and hard work, we shall remain at the forefront of power development and power delivery in Ghana and the sub-region.
Finally, on behalf of the Board and Management of the VRA, I extend my profound appreciation to each one of you for your invaluable contributions to the Authority's success and continued existence. Our organisation is privileged to have you as an employee and I want to take this opportunity to thank you all for your hard work and dedication.
It is my prayer that the good Lord will bless you and your families with peace this Christmas season and crown your efforts with success, good health and prosperity in the coming year. Thank you and God bless us all.
HAVE A MERRY CHRISTMAS AND A PROSPEROUS NEW YEAR
Ing. Isaac Kirk Koffi