Due to the high prospects of this project as established in the 2001 feasibility report

for both the economic and technical viability, the following issues are emerging:

• Recasting the 2001 Feasibility Report into the CDM Project Design Document (PDD);

• The base case scenario should be reviewed, as it is dynamic. It is anticipated that a 200 MWe emergency diesel power barge will be made available in Tema to supplement the low hydropower production levels. The 30MWe decommis­sioned thermal plant at Tema should be eliminated from the baseline analysis;

• Critical examination of the financials with the aim of bringing down the specific power to comparative levels with other generation methods;

• Working to attract other strategic investors to complete the financing scheme;

• Upfront funding from the estimated CERs to quick-start the project imple­mentation.

For a project such as this one, it is essential to ensure the commitment of the two

main private interests to the project, that is, the timber company and the brewery.

In addition, the terms of contract for trading the excess electricity are to be defined with the Public Utility Regulatory Commission (PURC). Finalizing the rates and costs associated with electricity sales is urgent because they have repercussions for the financial analysis. KITE will revise the financial analysis based on the cost of equipment, rate and cost negotiations with PURC, rate discussions with the brewery, and revise financing assumptions.

Scenario analyses will be carried out to explore a variety of potential project conditions, as an input to project design. These will include estimations of the level of investment required to make the project feasible, the electricity sales and purchase rates required for economic feasibility, and the pros and cons of delivering steam to the brewery. An Environmental Impact Assessment is also being prepared. Forestry practices of the main contributors of sawdust to the project are being verified to guarantee the sustainability of the whole production chain.

The proposed project seeks to convert a waste product with negative environ­mental impact (sawdust) into a highly demanded product, which has the potential to help generate income for industrial development (electricity) and poverty reduction (employment). Today, sawdust is considered as an environmental nuisance and largely goes unutilized. During power outages, all the big sawmills that produce the bulk of sawdust run expensive standby diesel generator sets to produce electricity for their production processes. Using waste sawdust to generate electricity for these sawmills is therefore an innovative response to local needs, and a contribution to climate change mitigation.

Finally, it should be mentioned that, besides its contribution to sustainable development and remarkable reductions in carbon dioxide emissions, this project has a tremendous potential for replication. The situation found in Kumasi is by no means unique and can be observed in many other developing countries, where similar pro­jects are also likely to be economically feasible.