Ghana, Tanzania and AfDB Sign US$ 153 Million in Loans and Grants for Energy and Poverty Reduction

07/03/2008
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Tunis, 7 March 2008 – The Governments of Ghana and Tanzania this week signed loans and grants of a combined amount of US$ 98.8 million to finance energy projects, underscoring the African Development Bank Group’s renewed emphasis on infrastructure development and poverty reduction in its Regional Member Countries (RMCs).

The loans were signed by AfDB Group Vice President for infrastructure private sector and regional integration, Mandla Gantsho, and the Ghanaian Ambassador to Tunisia, Lawrence Satuh.

Under the agreements, Ghana will receive a loan UA 27.6 million, equivalent to US$ 44.45 million, to finance the power systems reinforcement project, which aims at helping the country reduce electricity losses, improve the reliability of power supply and expand access to electricity for people living in the Kumasi area. Unreliable power supply is a major constraint on the country’s economic growth, greatly impeding the attainment of the country’s objective of becoming a middle-income country with a per capita income of US$ 1,000 by 2015.

Speaking during the signing ceremony, Mr. Gantsho, said the "project provides for the construction of a second bulk point and the refurbishment of the first one to increase the amount of power which can be supplied to the Electricity Corporation of Ghana in Khumasi by the Volta River Authority."

The project is part of a wider Ghana Energy Development and Access Project (GEDAP), being financed by the World Bank, the Swiss Secretariat for Economic Affairs, the Global Environment Facility and the government of Ghana. Upon completion in five years, the GEDAP will provide services to some 135,000 households and businesses through the national grid and renewable energy resources.

Earlier, the AfDB and the Ghanaian government signed a loan agreement of UA 40 million, equivalent to US$ 63.81 million, to finance the Northern Rural Growth Programme (NRGP). The ADF loan is expected to cover 58.5% of the total cost of the programme which is jointly financed with the International Fund for Agricultural Development (IFAD) and the Ghanaian government in order to help the country address the problem of poverty in the region by creating sustainable rural agricultural production and increasing income-generating activities.  The AfDB Group Vice President in charge of sector operations, Zeinab El-Bakri, signed for the Bank.

Similarly, the Bank Group and the Tanzanian government signed a loan and grant agreements of 26.68 million Units of Account (UA*) and a grant of 1.32 million UA, equivalent to a combined amount of UA$ 48 million, to finance the country’s  fifth Electricity Project aimed at securing, improving and extending sustainable supply of power to businesses and households in rural towns and suburban areas in Mwanza, Shinyanga, Arusha and Dar es Salaam regions.

Tanzania’s Finance and Economic Affairs Minister, Mustafa Mkulo, signed the loan and grant agreements for his country while Vice President Gantsho signed for the Bank Group.

* 1 UA = 1.61055 USD as at 07/03/2008