Yusupha Crookes, World Bank Country Director for Ghana.
The Electricity Company of Ghana (ECG) has received $60 million credit facility from the World Bank to improve its financial performance.
The credit facility, which was approved by the Bank’s Board of Executive Directors, will also help minimize ECG’s commercial losses and ultimately contribute to increased revenue and cash flow.
The credit facility 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 sector and institutional development, electricity distribution improvement, electricity access and renewable energy, expanded capacity for electricity distribution improvement, revenue collection improvement, and management and planning enhancement.
According to the Bank, most of the 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.
It said as the agency responsible for managing the energy consumer accounts, ECG’s performance has a major impact on the entire energy value chain.
The Bank said improving ECG’s performance could help create better conditions for attracting private financing to generate desperately needed new power.
Yusupha Crookes, World Bank Country Director for Ghana, in a statement said, ‘We are happy to be providing additional resources to support Ghana’s energy sector.
‘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.’
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.
By Cephas Larbi
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