Announcement of Seven Million One Hundred Thousand Dollars Credit for Second Power Distribution Project in Ghana on June 17, 1971

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release ..So. 71/27 Subject~ $7 .1 r.1illion credit for second power June 17, 1971 distribution project in Ghana An electric power distribution project in Ghana, designed to improve the e:dstinA distribution network and supply electric power to ne\-1 areas, will be asBisted by financinG totaling $9.3 million from the Federal Republic of Germany, the United !anr,dom and the International Development Association (IDA). The project represents a continuation of the ~,Jorld Bank Group's earlier associa- tion with the developnent of electric power in Ghana. Previous lending for the power sector includes a ~ank loan of $47 nillion in 1962 to assist the Volta River • !)am project, an IDA credit of $10.0 willion in June 1968 for pouer distribution, and ~ Hank loan of $6.0 million in 1969 to the Volta Eiver Authority (VRA) for pm·1er expnnsion. 'l'wo organizations, vr~~ and the Electricity Corporation of Ghana (ECG) nre responsible for providinc public services of power in Chana. ECG is a publ:l.c auton- omous corporation which is charced with recponsibility for general distribution of poucr and generation in areas that cannot be connected economically to the Vt~ systeo. ECG's distribution e~pansion program for the period 1971-73 responds toe tener- al increase in the demand for power, particularly for industrial usej and the ex- pected grouth of sr.iall and L1edium industries. The project provides for expansion of distribution in existing areas of supply and iMprovement of existing facilities» supplies to areas not previously served~ the • substitution of hydro-power for diesel power and the cost of engineerin3 and train- ing services. /more  • IDA P.R •• No. 71/27 - Ghat1a - second power - 2 - ECG which is the beneficiary of the credit is responsible for execution of the projeict, and will be assisted by electrical and engineering consultants. The project is ex~ected to be completed by the end of 1973. ~he estimated total cost of the project is about $14.5 million, $4.4 million cf which r-- representing the local cost -- will be met by ECG. An IDA credit of $7 .1 mill:..on provides part of the total $10.1 million forei.gn exchange cost. . The Fedet . ~1 Republic of Germany through Kreditanstalt filr Wiederaufbau is contributinc to the foreign exchange cost with parallel financing equivalent to about $2.0 million. The Uaited Kingdom is providinG financing of ab~~t $200,000, and materials available in Ghana will account for another $D00,000. The IDA credit to the Republic of Ghana i,1ill be for a term of 50 years j in- • cludjug a 10-year grace period. It is interest free but carries a service charge of 3/ 4 of 1;l to meet IDA' s administrative expenses. The Government idll relend the px·oceeds of the credit to EGG at 7 1/ 4,~ interest, repayable in seven years, including a two year erace periodo - 0 - •