Ghana power cuts extended to Coca-Cola and Unilever plants

Ghana said it will cut power to factories including ones run by Unilever NV and Coca-Cola Co. to offset a worsening shortage of electricity.

Factories will lose power for 48 hours and then have continuous supply for six days, the Electricity Company of Ghana said on its website. Electricity will be available to residential areas for 24 hours, followed by cuts for 12 hours, the company said. The new schedule runs from yesterday through Jan. 1. Ghana is West Africa's second-largest economy and the second-largest gold producer in Africa.

"The power cuts are a matter of necessity," Melissa Verreynne, an economist at NKC Independent Economists based near Cape Town, South Africa, said "The negative impact on economic growth, productivity, in the manufacturing sector especially, will be notable."

Ghana cut its economic growth forecast for 2015 in about half because of soaring inflation and chronic power shortages that are curbing investor sentiment. President John Dramani Mahama created a Ministry of Power last month to deal with shortages that worsened this year because of a lack of natural gas and low water levels at the largest hydroelectric dam.

The world's second-largest cocoa producer has struggled to chip away at power and water shortages that have held back investment in the economy since the discovery of oil in 2007. A delay in opening a natural gas processing plant in Atuabo has worsened a drop in supply of the fuel from Nigeria. The operator of the nation's largest dam has shut down two turbines because of low water levels.

Factories run by Ghana Cement, Fan Milk Ltd., SABMiller Plc's Accra Brewery Ltd., will also face cuts, according to the Electricity Company of Ghana.

Peak demand for power is about 2,000 megawatts in the country of about 26 million people. The gap between demand and supply widened to as much as 600 megawatts earlier this year. The Electricity Company is reducing supply to factories by 120 megawatts and by 300 megawatts to homes, Stephen Doku, director of power at the Ministry of Energy, said by phone.

The government plans to add 770 megawatts of supply to the national grid by 2015, Energy Minister Emmanuel Armah-Kofi Buah said in October.

Perseus Mining Ltd. said yesterday it agreed to a 25 percent reduction in power supply from the national grid to its Edikan gold mine. Five other international mining companies also signed on to the cuts, the company said in a statement. While the company plans to use stand-by generators, it is not clear how much production and unit costs will be affected, the company said.

Gold Fields Ltd. has diesel generators on 24-hour standby because of ongoing power cuts, Sven Lunsche, a spokesman for the Johannesburg-based company, said. The company produces about a third of its gold from Ghana .

"This has been an issue for a number of years and there have been no significant production stoppages as a result," he said.