The World Bank has greenlit a $250 million credit from the International Development Association (IDA) and a $10 million grant from the Energy Sector Management Assistance Programme to support Ghana’s four-year Energy Sector Recovery Programme for Results (PforR).
This initiative is designed to bolster Ghana’s Energy Sector Recovery Programme (ESRP) by enhancing the financial stability of electricity distribution and expanding access to clean cooking solutions.
Ghana faces significant electricity distribution losses due to low collection rates and tariffs that don’t cover costs, impairing the financial and operational efficiency of its energy utilities. To address this, the government allocates about 2 percent of its GDP annually to cover the sector’s financial shortfall.
Robert Taliercio, World Bank Country Director for Ghana, Liberia, and Sierra Leone, emphasized the World Bank’s commitment to revitalizing Ghana’s energy sector through this results-based financing, aiming for financial sustainability.
The programme focuses on strengthening revenue collection and improving energy supply quality by investing in prepaid metering and enhancing commercial and meter management systems of distribution utilities.
The PforR complements ongoing regulatory and policy reforms in the energy sector, supported by the World Bank’s Development Policy Finance series, such as the IDA-supported First Resilient Recovery Development Policy Financing operation approved in January 2024, and the ongoing IMF Extended Credit Facility Programme for Ghana.
Dhruva Sahai, Programme Leader for Infrastructure, noted that the PforR aims to lower electricity service costs by improving economic dispatch of generation and enhancing the commercial and operational performance of distribution utilities.
Additionally, the Clean Cooking Component of the Programme seeks to increase access to Liquefied Petroleum Gas for households, schools, and businesses in Ghana. It will offer direct incentives to subsidize the cost of stoves and accessories (excluding cylinders) for first-time domestic users, commercial caterers, and secondary schools.
This component aims to increase women’s access to clean cooking solutions, reduce time poverty, lower health risks from smoke exposure, and improve women’s income-generating opportunities and employability.
The International Development Association (IDA), established in 1960, supports the world’s poorest countries by providing grants and low to zero-interest credits for projects and programs that spur economic growth, reduce poverty, and enhance living conditions. IDA is a major source of assistance for the world’s 74 poorest countries, 39 of which are in Africa, positively impacting the lives of 1.3 billion people. Since its inception, IDA has provided $458 billion to 114 countries, with annual commitments averaging about $29 billion over the last three years, with 70 percent directed to Africa.
