The World Bank has approved a $250 million credit from the International Development Association (IDA) and a $10 million grant from the Energy Sector Management Assistance Program to fund the 4-year Ghana Energy Sector Recovery Program for Results (PforR). This initiative aims to bolster the financial viability of electricity distribution and expand access to clean cooking solutions in Ghana.
Ghana’s electricity distribution faces significant challenges, including high losses due to low collection rates and tariffs that do not cover costs. These issues have strained the financial and operational performance of energy utilities, prompting the Ghanaian government to allocate about 2% of its GDP annually to address the sector’s financial deficits.
Robert Taliercio, World Bank Country Director for Ghana, Liberia, and Sierra Leone, emphasized the importance of the program, stating, “Through this important results-based financing, the World Bank is committed to supporting the recovery of Ghana’s energy sector and its financial sustainability. The operation aims to strengthen revenue collection and improve the quality of energy supply through investments in prepaid metering and in the commercial and meter management systems of distribution utilities.”
The PforR will complement ongoing regulatory and policy reforms in Ghana’s energy sector. These reforms are supported by the World Bank’s Development Policy Finance series and the ongoing IMF Extended Credit Facility Program for Ghana. The focus will be on enhancing institutional capacity and accountability, and providing financing directly to energy sector utilities for capital expenditure programs.
Dhruva Sahai, Program Leader for Infrastructure, highlighted the program’s objectives, saying, “The PforR aims to reduce the cost of electricity service provision by improving the economic dispatch of generation and by strengthening the commercial and operational performance of distribution utilities.”
A significant component of the program is the Clean Cooking Initiative, which seeks to increase access to Liquified Petroleum Gas (LPG) for households, schools, and businesses. The PforR will offer subsidies for stoves and accessories—excluding cylinders—to first-time domestic users, commercial caterers, and secondary schools. This initiative aims to enhance women’s access to clean cooking solutions, reduce health risks from smoke exposure, and improve women’s economic opportunities.
The International Development Association (IDA), established in 1960, is a key contributor to the world’s poorest countries, providing grants and low to zero-interest credits for projects that stimulate economic growth, reduce poverty, and improve living conditions. Since its inception, IDA has provided $458 billion to 114 countries, with a significant portion of these resources allocated to African nations.
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