[ 2015-05-03 ]

World Bank mobilizes $60m financing for electricity in Ghana
The World Bank Group’s Board of Executive
Directors today approved a US$60 million
International Development Association (IDA*)
credit for Ghana to improve the Electricity
Company of Ghana’s (ECG) financial performance,
minimize its commercial losses, and ultimately
contribute to increased revenue and cash flow.

The credit provides additional financing to the
Ghana Energy Development and Access Project
(GEDAP) originally approved by the Bank Group’s
Board on July 26, 2007, including US$90 million
and an additional US$70 million approved on June
3, 2010.

The GEDAP funds have broadly supported (i) Sector
and Institutional Development; (ii) Electricity
Distribution Improvement; (iii) Electricity Access
and Renewable Energy; (iv) Expanded Capacity for
Electricity Distribution Improvement; (v) Revenue
Collection Improvement; and (vi) Management and
Planning Enhancement.

Most of this new financing will be used to
increase the scope and impact of ongoing
activities to strengthen ECG’s billing and
metering systems to improve its operational
efficiency. As the agency responsible for managing
the energy consumer accounts, ECG’s performance
has a major impact on the entire energy value
chain.

Ghana is currently experiencing a significant
shortage of electricity. Improving ECG’s
performance could help create better conditions
for attracting private financing to generate
desperately needed new power. This shortage of
power is also curtailing economic growth and
adversely affecting the profitability and
sustainability of businesses.

ECG’s operational and financial performance is
critical to the sustainability of the entire
energy sector value chain.

Despite continued efforts in reducing operational
losses and cost-reflective tariffs, ECG’s
revenue collection performance has declined while
its costs have increased sharply. The
long-standing issue of public bodies not paying
for their electricity continues to burden the
sector without any reimbursements of the
uncollected revenues from the Government.

“We are happy to be providing additional
resources to support Ghana’s energy sector and
it is our hope that ECG would use these resources
to build much needed operational capacity, fix the
bottlenecks hindering its smooth operation and
financial stability, and deliver reliable and
sustainable services to its customers,” said
Yusupha Crookes, World Bank Country Director for
Ghana.

ECG needs to invest about US$200 million annually
over the next decade to keep up with rapidly
growing power demand and improve service quality
to acceptable levels. A significant portion of
ECG’s investments are funded by short-term
commercial debt and suppliers’ credits, which
are expensive and pose an additional financial
burden on the sector.

Source - World Bank

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