Ghana: US$ 43 Million for Energy Development and Access Program
Tunis, 28 November 2007 – The African Development Fund (ADF) will support efforts by the Ghanaian government to resolve the problem of unreliable energy supply which is negatively impacting the economy, with a 27.60 million Units of Account (UA*), about US$ 43.38 million loan, approved by the ADF’s Board on Wednesday in Tunis.
The loan from the concessional arm of the African Development Bank (AfDB) Group will finance the Power System Reinforcement Project to enable the country address the energy constraints and related problems that which result in constant power outages.
The objective of the project is to reduce electricity losses, improve the reliability of power supply and increase the population’s access to electricity in Kumasi. The ultimate goal is to reduce poverty by ensuring secure and reliable supply of high quality energy services for all Ghanaian homes (urban and rural), businesses, industries and the transport sector.
The project will be located in Kumasi and will have the following outputs:
- A 161/33 kV substation with a capacity of 132 MVA;
- Reinforcement of an existing 161/33 kV substation;
- Two 33/11 kV substations each with a capacity of 40 MVA;
- 43 km of 33 kV lines;
- 52 km of 11 kV lines;
- 731 smaller more efficient low voltage networks.
The project area covers Kumasi, the second largest city in Ghana after Accra, with the second highest concentration of industries after Accra-Tema and a population of about 1.17 million. The manufacturing industries include sawmills, breweries, pharmaceuticals and electrical appliances. Kumasi has a current peak demand of about 161 MW and accounts for 15% of the total sales of the Electricity Corporation of Ghana (ECG).
Kumasi is a nodal city with many outlying towns and villages. It is therefore an important trade and commercial centre for foodstuffs, raw materials for industry and finished goods. Its central location in Ghana ensures that goods in transit to and from Ghana’s northern and western neighbours, for example, Burkina Faso, Mali, Niger and Cote d’Ivoire (Ivory Coast) pass through Kumasi. The major beneficiaries are the Volta River Authority (VRA) and the ECG, which handles most of Ghana’s power distribution, covering the central, eastern, and western regions where 1.4 million of its customers account for over 80% of electricity distribution in the country.
The total cost of the project is estimated at UA 31.57 million. The ADF loan will cover 87.43% of the costs. ECG and VRA will contribute UA 3.36 million (10.4%) and UA 0.61 million (1.93%), respectively.
The AfDB Group operations in Ghana started in 1973. To date, the Group’s commitments in the country stand at US$ 1.55 billion in 93 operations.
* 1 UA = 1.57188 USD = 1.42403 GHS as at 28/11/2007