The World Bank has sanctioned a $250 million credit via the International Development Association (IDA) and a $10 million grant from the Energy Sector Management Assistance Program to support Ghana’s 4-year Energy Sector Recovery Program for Results (PforR). This initiative is geared towards enhancing the financial sustainability of electricity distribution and expanding the availability of clean cooking solutions in Ghana.
Ghana faces substantial challenges in its electricity distribution, marked by high losses due to low collection rates and tariffs that fail to cover costs. These issues have strained the financial and operational capacities of energy utilities, prompting the Ghanaian government to allocate approximately 2% of its GDP annually to tackle the sector’s financial gaps.
Robert Taliercio, World Bank Country Director for Ghana, Liberia, and Sierra Leone, underscored the program’s significance, stating, “Through this crucial results-based financing, the World Bank is dedicated to supporting Ghana’s energy sector recovery and ensuring its financial viability. The operation aims to strengthen revenue collection and enhance energy supply quality by investing in prepaid metering, commercial systems, and meter management for distribution utilities.”
The PforR will complement existing regulatory and policy reforms within Ghana’s energy sector, supported by the World Bank’s Development Policy Finance series and the IMF Extended Credit Facility Program for Ghana. The emphasis will be on bolstering institutional capacity and accountability, and providing direct financing to energy sector utilities for capital expenditure programs.
Dhruva Sahai, Program Leader for Infrastructure, highlighted the program’s goals, stating, “The PforR aims to lower electricity service provision costs by improving generation economic dispatch and enhancing commercial and operational efficiency of distribution utilities.”
A key aspect of the program is the Clean Cooking Initiative, which aims to increase access to Liquified Petroleum Gas (LPG) across 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 improve women’s access to clean cooking solutions, reduce health risks from smoke exposure, and enhance women’s economic opportunities.
