Japanese conglomerate, Sumitomo Corporation, hopes to use its presence in Ghana to launch itself into West Africa and the rest of the continent, going forward.
The company, which has over 50,000 megawatts of thermal power generation across the world, hopes its success in Ghana would convince promoters and executive in Japan to give the go-ahead for it to start an independent power project in Ghana and gradually expand to other parts of Africa.
“We would like to expand our activities in Africa and we are happy with the friendly environment that Ghana offers, which I’m not too sure pertains in other countries,” a Deputy General Manager of Sumitomo Corp of Japan, Mr Tsutomu Akimoto, told the GRAAHIC BUSINESS.
The conglomerate has various product lines including food products; chemical and electronics; metals and minerals; electric power and energy; real estate; transportation; information technology; retail, finance and insurance.
Sumitomo’s electric power and energy business unit is participating in the 350 megawatt Kpone Independent power plant led by Cenpower, with 28 per cent shares with additional responsibility as the strategic technical partner to lead the operation and maintenance of the plant.
The company wants to use its first project in Ghana to grasp the rudiments of operating in this part of he world before launching itself big on the Africa Continent.
“Our presence in Ghana is very strategic to us. First, we have to successfully implement this project and then expand our activities based on this experience in Ghana. Ghana is an excellent legal environment and the people’s understanding of Ipps is very rich and this is very important,” he said.
Mr Akimoto praised the country’s legal environment and the wealth of knowledge on Ipps which had made easier for projects of that magnitude to remain bankable.
“The legal environment is very important in arranging project finance for turnkey projects such as Ipps. Up to 85 per cent of the financing of such projects could be as a result of the financial engineering, with 20 per cent equity,” he explained.
The Japanese thermal powerhouse generates more than 50,000 megawatts of thermal power across the world, but is yet to start anything on its own in Africa. Its relationship with Cenpower started in 2011 but it is now its strategic partner.
Mr Akimoto said for the Ipp to be bankable, they needed a proper regime for negotiating good ppA deals with the Electricity Company of Ghana (ECG) and the government, as well as fuel supply agreement with the supplier.
“We hope to strike strong relationships with the local people so as to leverage to expand to West Africa and other African countries,” he said.
Sumitomo Corporation owns and operates the Shuweihat S1 (S1) in Abu Dhabi, United Arab Emirates.
The S1 generates 1,500 megawatts of electricity, the largest by any single power plant in the area, supplying 15 per cent of the electricity consumed in the UAE. — GB