(4 Minutes Read)
Ghana’s energy sector is still short of revenue, and the World Bank is releasing USD 260 million in response to the crisis. The programme financed in this way will make it possible to limit state intervention in the energy sector.
How can the financial autonomy of Ghana’s electricity sector be strengthened? The answer is expected from the Ghana Energy Sector Recovery Programme (ESRP). The ESRP has the financial backing of the World Bank Group, through its subsidiary, the International Development Association (IDA), which is providing a USD 250 million loan to the Ghanaian government.
Accra will also receive a USD 10 million grant under the World Bank’s Results-Based Energy Sector Recovery Program (RBCSP). The 4-year operation aims to strengthen revenue collection and improve the quality of energy supply through investments in prepayment meters and distribution companies’ commercial and meter management systems, explains Robert Taliercio, World Bank Country Director for Ghana, Liberia and Sierra Leone.
At present, electricity distribution losses are high in Ghana due to a low collection rate and collection tariffs that are below cost, which undermines the operational and financial performance of energy utilities in the country, according to the World Bank. Under these conditions, the Ghanaian government transfers around 2% of gross domestic product (GDP) each year to cover the financial deficit in the energy sector.
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The PforR, set up with a grant of €10 million, will help to reduce the cost of electricity supply by improving the economic distribution of production and strengthening the commercial and operational performance of distribution services. The government’s Energy Sector Recovery Programme also has a component dedicated to clean cooking.
The World Bank’s support will give Ghanaian households, schools, and businesses “easier” access to liquefied petroleum gas (LPG) for domestic and commercial purposes. As part of this, the PforR will provide direct incentives to subsidise the cost of stoves and accessories (excluding cylinders) for early domestic users, commercial caterers, and senior schools. According to the World Bank, the programme aims to increase women’s access to clean cooking solutions, reduce time poverty, reduce health risks associated with exposure to smoke from charcoal stoves, and improve income generation opportunities and employability of women.
