Announcement of the Forty-Seven Million Dollars Loan for Volta Project in Ghana on February 8, 1962

W O R L D ~, •. N'.;I~ • INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 25 1 0. C. TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 62/9 SUBJECT: $4 7 million loan for February 8, 1962 Volta project in Ghana The World Bank today made a loan equi,TPlent to $47 million to the Volta River Authority., an agency of the Government of Ghana. The loan will help to finance construction by the Authority of a dam and hydroelectric power project on the Volta River at Ak.osombo, together with a transmission system to supply power to so,.ithern Ghana. The Bank's loan forms part of an international financing program that will ~ake possible construction not only of the dam and power station on the Volta • River but also of an aluminum smelter which will be the largest single consumer of the electric power produced. Additional international financing for the hydro- elP.ctric project will be provided by long-term loans from the United states through the :A~ency :f'or International Development (AID) and the Ex.l">Ort-Import Bank of Washington., which will prov1¥ $27 million and $10 million respectively, and from the United Kingdom through its Export Credits Guarantee Department, which will lend ~5 million (about $14 million). The Government of Ghana. will itself pro- vide up to b35 million ($98 million) out of Ghana's own resources as equity invest- m~nt in the power project. The Volta hydroelectric scheme has an important place in Ghana's plans for economic development. In its ~cope and size it ranks with the largest undertakir-'€s cf its kind so far developed anywhere. The main dam, of rockfill construction, will rise 244 feet above river level and 370 feet above its foundations., and will have a crest length of over 2,000 feet. It will create a reservoir, entirely 'With- in Ghana, about 300 miles long and with a surface area. of' 3,275 square miles. .  - 2 - The power station, located just below the dam, will have an initial capacity of' 589,000 kilowatts, provided by four 147, 200-kilowatt generating units, a.nd an • ultimate capacity of 883,000 kilowatts. This output compares with a total of about 70,000 kilowatts supplied by the thermal generating units which are at present the sole source of elec·tric power in Ghana. Transmission lines will run from Akosombo to the seaport of Tema., 44 miles away, where the aluminum smelter is to be built, and thence for a f'Urther 18 miles to Accra;, the capital of Ghana. A separate ring of transmission lines, approximately 400 miles long, will supply power to towns, villages and mines of southern Ghana, including Takoradi and Kumasi. Completion of the first stage of the Volta scheme is expected to take about five years. Although the possibility of building a large hydroelectric station on the Volta River was first discussed nearly half a century ago, it has always been • clear that the level of demand for electric power in Ghana would not be high enough, in the initial stages at least, to make economic use of the output of such a station unless a major industrial consumer could be found. The economic feasi- bility of the Volta hydroelectric scheme thus depends on construction of the ~luminum smelter at Tema. which will buy a large proportion of the power generated at Akosombo. This smelter is to be constructed and operated by the Volta Aluminium Company, Limited (VALCO), formed by two aluminum producers, Kaiser Aluminum and Chemical Corporation and Reynolds Metals company. These companies will have a substantial equity interest in the project, and also will be assisted by loans anct ~·uarantees provided by the u.s. Government. The smelter will cost well over $100 million, and will have an annual capacity of 100,000 to 150,000 tons. The Executive Directors of the Bank approved the Bank's participation in the Volta financing on September 7, 1961. The loan is for a term of 25 yea.rs, and bears interest o:e 5-3/41, per annum, including the l'fo commission which is allc)cated to the Bank's Special Reserve. Amortization will begin February 15, 1968. loan is guaranteed by the Government of Ghana.. The •