Ghana - Accra Tema Water Supply and Sewerage Project

RESTR ICTED FlLE COlPY Report No. p-7 This report was prepared for use within the Bank and its affiliated organizations. They do rnot accept responsibility for its occuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PR ESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF GHANA July 31, 1969  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF GHANA 1. I submit the following report and recommendation on a proposed development credit in an amount in various currencies equivalent to US$3.5 million to the Republic of Ghana to assist in financing a water supply and sewerage project in the Accra-Tema area. PART I - HISTORICAL 2. The project was identified as a result of a consultantst study of the water supply and sewerage needs of the Accra-Tema area under a UNDP (Special Fund) project started in 1963 with the World Health Organi- zation (WHO) as the executing agency. Detailed design of the project was undertaken in December 1967 under the second phase of the UNDP project, and in June 1968 the Government requested the Association's assistance in financing the proposed project, which forms part of a Master Plan for water supply and sewerage of the area. The proposed project was appraised in October 1968, and negotiations were held in Washington in May 1969. The negotiators for the Republic of Ghana and the Ghana Water and Sewerage Corporation (GWSC) were:His Excellency E. M. Debrah, Ambassador of Ghana to the United States; Mr. C. K. Annan, Managing Director, GWSC; Mr. A. Saravanapavan, Area Manager, GNSC; Mr. C. B. Mate-Kole, Principal Assistant Secretary, MiLnistry of Works and Housing; and Mr. Chinery-Hesse, Acting Solicitor General. 3* The following is a summary statement of Bank loans and IDA credits to Ghana as of June 30, 1969: Loan or Amount (US$ million) Credit No. Year Borrower Purpose Bank IDA Undisbursed 310 GH 1962 VRA Power 47.0 0.1 I18 GH 1968 Republic of Power distri- Ghana bution 10.0 5.9 618 GH 1969 VRA Power expan- sion 6.0 6.0 Total (less cancellations) 53.0 10.0 of which has been repaid to Bank and others 2.1 Total now outstanding 50.9 Amount sold: 0.1 of which has been repaid 0.1 Total now held by Bank and IDA 50.9 10.0 Total undisbursed 6.1 5.9 12.0  - 2 - The Volta Project, financed by Loan No. 310-GH, was completed in early 1966 about a year ahead of schedule and at considerable savings under the original cost estimates. The loan documents for a second loan of $6.0 million to the Volta River Authority for the Volta Expansion Project were signed on June 23, 1969. The construction works for the power distribution project, financed by Credit No. 1l8-GH, is progressing satisfactorily. The Electricity Corporation of Ghana had had difficulties on its accounting and financial side, but has now taken remedial measures suggested by IDA, including employment of a firm of consultants and a qualified chief accountant. 4. The proposed credit would be the fifth Bank group financing in Ghana, including a credit of $1.5 million for a Highway Engineering Project, which was signed on July 29, 1969. A credit of US$1.3 million for a Fisheries Project is seheduled for presentation to the Executive Directors shortly. PART II - DESCRIPTION OF THE PROPOSED CREDIT 5. BORROWER: The Republic of Ghana. BEIIEFICIARY: The Ghana Water and Sewerage Corporation. PURPOSE: To finance the foreign exchange cost of extending the water distribution system in the Accra-Tema area and installing a sewerage system for central Accra, together with consulting services. AMOUNT: US$3.5 million. AMIORTIZATION: In 50 years, including a 10-year period of grace through semiannual installments of 1