AfDB grants loans to Ghana, Tanzania for energy projects

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The Governments of Ghana and Tanzania have signed agreements for loans and grants with the African Development Bank AfDB totalling US$ 98.8 million to finance energy projects.

A statement from the AfDB received in Accra on Friday said this underscored the African Development Bank Group’s renewed emphasis on infrastructure development and poverty reduction in its Regional Member Countries (RMCs).

The agreement for Ghana was signed by AfDB Group Vice President for infrastructure private sector and regional integration, Mandla Gantsho and the Ghanaian Ambassador to Tunisia, Lawrence Satuh.

Tanzania’s Finance and Economic Affairs Minister, Mustafa Mkulo, signed for his country while Vice President Gantsho signed for the Bank Group.

The statement said under the agreements, Ghana would receive a loan of US$ 44.45 million, to finance the power systems reinforcement project, which was aimed at helping the country reduce electricity losses, improve the reliability of power supply and expand access to electricity for people living in the Kumasi, Ghana’s second largest city.

Unreliable power supply is a major constraint on the country’s economic growth, greatly impeding the attainment of the country’s objective of becoming a middle-income country with a per capita income of US$ 1,000 by 2015.

Mr. Gantsho said the project provided for the construction of a second bulk point and the refurbishment of the first one to increase the amount of power which can be supplied to the state-owned power distributor Electricity Corporation of Ghana in Kumasi by the state-owned power producer Volta River Authority (VRA).

He said the project was part of a wider Ghana Energy Development and Access Project (GEDAP) being financed by the World Bank, the Swiss Secretariat for Economic Affairs, the Global Environment Facility and the government of Ghana.

Upon completion in five years, the GEDAP will provide services to some 135,000 households and businesses through the national grid and renewable energy resources.

Earlier, the AfDB and the Ghanaian government also signed a loan agreement of US$ 63.81 million to finance the Northern Rural Growth Programme (NRGP).

The ADF loan is expected to cover 58.5% of the total cost of the programme which is jointly financed with the International Fund for Agricultural Development (IFAD) and the Ghanaian government in order to help the country address the problem of poverty in the region by creating sustainable rural agricultural production and increasing income-generating activities.

The AfDB Group Vice President in charge of sector operations, Zeinab El-Bakri, signed for the Bank.

In another development, the Bank Group and the Tanzanian government signed a loan and grant agreements of US$44.31and a grant of US$2.19 to finance the country’s fifth Electricity Project aimed at securing, improving and extending sustainable supply of power to businesses and households in rural towns and suburban areas in Mwanza, Shinyanga, Arusha and Dar es Salaam regions. Panapress.

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