Analysis of the Financial Viability of a 50 MW Hydropower Plant in Ghana

This study assessed the financial viability and bankability of a 50 MW hydropower plant at Pwalugu, Ghana, using the IAEA’s FINPLAN model. Under base-case conditions of a 50% capacity factor, a tariff of GHS 1.00/kWh and export credit at 14%, the project is viable, with a net present value (NPV) of GHS 1,931 and an internal rate of return (IRR) of 18.5%. Output is the dominant risk: reducing the capacity factor from 50% to 30% cuts NPV by about 70%, and below about 22% the project is no longer viable. At 20%, NPV turns negative, and first dividends slip from about 2034 to about 2053. The break-even tariff is about 0.43 GHS/kWh. Cheaper export credit adds little value in the base case, but under severe drought the project breaks even only if credit costs 10% or less. Debt service is most constrained during loan repayment (2031–2045). The study recommends that project sizing consider the drought-year capacity factor and additional solar generation during the drought season. Again, policy regulators are advised to set power purchase agreement (PPA) tariffs with a clear margin that supports project viability and aligns with society's ability to pay. Finally, project planners should negotiate concessional export credit at or below 10% to support income generation even during the drought season.