How the company managed to start construction with a unique vendor financing approach

The Bridge Project in Ghana is yet another energy project for the EPC Business Unit - METKA of MYTILINEOS, that establishes its market-leading position in sub-Saharan Africa.

Located in Tema, Ghana, Bridge is a transformational project for the area, as it will rapidly add much-needed generation capacity to the country. It will initially run on LPG, but when natural gas is available, it will be able to switch. Eventually it will become one of the largest LPG fueled power plants in the world, complied of course with the most stringent local and international environmental requirements.

MYTILINEOS is the construction contractor with a contract value approximately 363 $ million. The consortium sponsors are Early Power Limited, formed by Endeavor Energy, Sage Trading Group, a leading Ghanaian fuels company, and General Electric achieved a critical milestone for the Bridge Power Plant in Ghana, with a Notice to Proceed for stage 1, representing the first 202MW phase of the total 400 MW project.  

What is more unique about the Bridge Project is innovative vendor financing structure will substantially shorten the time required for construction commencement.

The company has worked with the consortium Sponsors to provide a groundbreaking financing solution that will safeguard the investment and accelerate its implementation. In particular, MYTILINEOS will offer limited recourse vendor financing to the Bridge Project, including an EPC Contract price deferral mechanism supported by a guarantee by the globally renowned expert company GuarantCo. This innovative vendor financing structure is expected to substantially shorten the time required for construction commencement, thus best serving the purpose of promptly contributing to the energy adequacy of the country.

The aforementioned unique vendor financing approach offers project sponsors substantial benefits, including the flexibility to arrange a permanent financing solution with commercial lenders and DFIs on time and in optimal terms. It also allows Sponsors to better manage their relationship with the host government as construction can proceed apace during financing negotiations. Besides, long delays to construction commencement can be a considerable source of friction, especially where the EPC Contractor can only proceed with the contracted works after the financial closure of the main financing arrangement.

It is nonetheless one of the most exciting and challenging power projects in the world as it will diversify Ghana’s current power generation fuel mix while it will provide energy security to a country with substantial and crucial power needs. It will create hundreds of jobs (majority Ghanaian) during construction, while a further 125 people will be employed as part of ongoing operations of the life of the plant. In addition, approximately 250 indirect (mainly local) jobs supporting the project will be created.

The first stage of the plant’s construction is expected to take a total of 24 months, although power will initially come online in 10 months and the combined cycle portion of Stage 1 will be completed in the fourth quarter of 2020.

As stated in the official Early Power Limited’s press release, Panagiotis Gardelinos, General Manager of MYTILINEOS’ EPC Business said: "We are delighted to have worked with Endeavor to realise the first stage of the 400MW multi-fuel combined cycle Bridge Power project in Ghana and to implement an innovative structure of supplier credits to enable full construction of the Project while the sponsors finalize arrangements for permanent financing. This is the third project in Ghana for METKA, the EPC Business Unit of MYTILINEOS and demonstrates our continued commitment to deliver to all citizens a future with energy autonomy, always based on the latest technological developments and international best practice. We are proud that we are able to provide sustainable energy solutions worldwide and especially in Sub-Saharan Africa where the needs are so great.”