Announcement of Six Million US Dollars Loan for Electric Power in Ghana on June 4, 1969

INTERN/\TIONAL BANK FOR .RECONSTRUCTION AND DEVELOPMENT 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 69/35 Subject: $6 million loan for electric June 4, 1969 power in Ghana The World Bank today announced a loan equivalent to $6 million to the Volta River Authority in Ghana for a project which involves installation of two gen- erating units which will bring the Volta hydroelectric power plant to its full capacity of 882 megawatts, expansion of substation capacity, and consultants' services. The project will enable the Authority to provide the additional power required for an aluminum smelter and to increase the supply of power to the main towns of Ghana. The loan to the Volta River Authority (VRA) will be guaranteed by the Republic • of Ghana. It will be for a tenn of 25 years, including a 10-year grace period, with interest at 6-1/2%. The Volta River project, cne of the largest hydroelectric schemes in the world, was built with financing provided by the World Bank ($47 million), agen- cies of the Governments of the United States ($29.5 million) and the United Kingdom ($4 million),· and the Government of Ghana ($82 million). At the same tb1e arrangements were made for the construction of an aluminum smelter 44 miles away at the sea.port of Tema by the Volta Aluminium Company Limited (VALCO). The original project consisted of a dam on the Volta River at Akosombo, a powerho\lse with four 147-MW generating units, and a 500-mile, 165-kilovolt trans- mission ring to deliver power in bulk to the aluminum smelter, several large mining enterprises, and the Electricity Corporation of Ghana (ECG) which provides power for general consumption throughout Ghana • The project was completed in 1966, • /more Bank P.R. No. ~/35 - Ghana-Power - 2 - about a year ahead of schedule, at a cost of $162.5 million compared with the • original estimate of $189.7 million. VALCO utilizes the bulk of Volta power, currently accounting for 75% of its sales and 52% of its revenues. VALCO is planning to expand its production capacity and, under a power sales agreement, the Volta River Authority is connnitted to furnish the additional power required by VALCO. The additional capacity now to be installed at Akosombo will enable VRA to meet its contractual obligations to VALCO and also to provide for Ghana's domestic power requirements until 1977. The present project, which is part of VRA's expansion program for 1969-72, will cost the equivalent of $14.4 million. The foreign exchange component of • $12.2 million will be provided as follows: World Bank $6 million; Canada $5.43 mil- lion; USAID $650,000 from the undisbursed portion of its original Volta loan; and $100,000 from the original World Bank loan. VRA will contribute the equivalent of $2.21 million from its own resources. The World Bank loan will finance the pur- chase and installation of turbines at Akosombo, and substation equipment for the smelter and the towns of Terna, Sekondi-Takoradi and Kumasi. It will also finance the services of consultants who will review VRA's future power exp~nsion plans and advise VRA on organizational matters. The International Development Association, an affiliate of the World Bank, ex- tended a credit of $10 million in June 1968 to improve the facilities of the Elec- tricity Corporation of Ghana which is responsible for the distribution of Volta power in southern Ghana and for the generation and distribution of diesel power in areas that cannot as yet be economically connected to the Volta transmission system. - 0 - •