Announcement of Ten Million Dollar Credit for Power Distribution in Ghana on June 12, 1968

o"'''f.Lo,.,.,~ ,/'" °"'> 0 i 7. (1-M;;:::I!!:::::!~~ "... ~ ....... • INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 68/14 Subject: $10 million credit for power June 12, 1968 distribution in Ghana A program of the Electricity Corporation of Ghana to extend and improve its distribution system will be assisted by a $10 million credit from the International Development Association (IDA). The program will enable the Corporation to meet the country's growing demand for electricity and make fuller use of power generated at the Volta River hydroelectric project which was built with the assistance of a World Bank loan of $47 million made in 1962. • Demand for electricity in Ghana has been growing at an average annual rate of 13%. Sales are concentrated principally in the four major cities, Accra, Tema, Kumasi, and Secondi-Takoradi, which account for about 901c» of the demand. Total generating capacity is about 678 megawatts, of which 588 MW is owned and operated by the Volta River Authority which supplies an aluminum smelter, gold and diamond mines, and the Electricity Corporation of Ghana (ECG). Following completion of the Volta project in 1966, ECG was established as an autonomous govermnent corporation to distribute power in Ghana to consumers other than the smelter and mines. The project now being undertaken will make ,ossible a substantial increase in ECG's purchases of Volta power which is less costly than energy produced from diesels now in use. By 1972, it is estimated that 96.5% of ECG's power will come from Volta. The credit will be extended to the Republic of Ghana for a period of 50 • years. It will be free of interest but a service charge of 3/4 of 11 will be made to meet IDA's administrative costs. The Government of Ghana will /more  • IDA Press Release No. 68/I.4 June 12, 1968 Ghana -- - 2 - relend the proceeds of the credit to the Electricity Corporation at 6-1/41. interest, repayable in 20 years including a three-year per!od of grace. ECG's program. for developing its transmission and distribution facili• ties was initi..ated in 1966 and the present stage is scheduled for complet:.on in 1972. It consists essentially of rehabilitation and expansion of the distribution systems in the four major cities and in 16 smaller urban centers. It also includes provision for 230 circuit miles of overhead transmission lines to supply secondary centers and to connect individual industrial loads such as rubber tire, ceramics, sugar and textile factories, and water works. Existing diesel generating plants will be expanded and some new ones built in areas which are not served by the Volta transmission system. Also in- cluded are buildings, service and construction vehicles, meters and other equipment. The total estimated cost of ECG's 1966-1972 program is equivalent to • $42.2 million. The 1DA credit will be applied to foreign exchange expendi- tures on the program from July 1968 through 1970. Procurement will be on the basis of international competitive bidding. In addition to the IDA credit, an amount of $7.5 million of the foreign exchange cost of t~e_pro- gram is being covered by credits from Germany and the United Kingdom. ECG's earnings during the program period will cover all the local currency require- ments and provide sufficient funds to purchase from the Government about $4.7 million as a contribution toward the foreign exchange cost. The re- maining foreign exchange, $7.5 million, will come from future external • borrowings. - 0 -