Dumsor WB mobilizes $60m financing for electricity in Ghana

The World Bank has approved a US$60 million credit for Ghana to improve the Electricity Company of Ghana’s financial performance.

  • Published:
24/7 Live - Subscribe to the Pulse Newsletter!

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

Download our mobile app today.

Android - Google Play Store

iPhone - Apple App Store

Recommended Articles

Recommended Videos





Top Articles

1 Photo Duncan Williams leads prayers at Donald Trump's inauguration servicebullet
2 Gambia Crisis Twitter explodes with rage over Hanna Tetteh's tweetbullet
3 Asantehemaa's Death Funeral of Asantehemaa underway [Photos]bullet
4 Corruption I'll make sure Opuni goes to jail - Kennedy Agyapongbullet
5 Francisca Oteng-Mensah 24 year old MP complains about unbearable...bullet
6 Asantehemaa’s Funeral Nana Afia Kobi to be buried with gold...bullet
7 Manhyia Palace One shot, several collapse at Asantehemaa’s...bullet
8 Gambia Crisis Ghana deploys military to Gambiabullet
9 Asante Kingdom This is Osagyefo Bayie, the acting...bullet
10 Asantehemaa's Funeral Mahama, MPs mourn Asantehemaa...bullet

Top Videos

1 In Zimbabwe President Mugabe’s 70 year-old aide marries his 23-year-old...bullet
2 Refugee Ghanaian to lose fingers after 7-hour trek to cross US borderbullet
3 Vitiligo Enam Honya - is challenging what you think about beautybullet
4 Obinim What happen'd when we fact checked Obinim's Bible knowledgebullet
5 Video Taxi driver terrified after an encounter with a ghostbullet
6 Woyome Judgement Debt Kweku Baako dances over Amidu's winbullet
7 Bishop Obinim Saga Teenagers disciplined by Obinim speak outbullet
8 Obinim saga We had sex only once - Obinim victims confessbullet
9 Watch Kumchacha delivers Counselor Lutterodt from 'demons'bullet
10 Kwame Nkrumah Interchange Water leaks from hole in...bullet

News