Centro International Conferencias Joaqium Chissano, Maputo ...siteresources.worldbank.org/EXTAFRREGTOPENERGY/Resources/7173… · Centro International Conferencias Joaqium Chissano,

Centro International Conferencias Joaqium Chissano,

Maputo, MozambiqueJune 9th - 12th, 2009

BY

Ing A. T. Barfour FGhIE, FID

Project Coordinator - GEDAP

Ministry of Energy – GhanaJune 2009

PRESENTATION OUTLINE

• Overview of the Ghana / Power Sector

• Electricity Generation in Ghana

• Historical Background

• National Electrification Scheme

• Implementation Strategy & Schemes

• Financing RE

• Key Challenges

• Way Forward and Conclusion

GHANA

- Land Area: 238.5 km2

- Population: 18,845,265

(2000 Census)

-Electricity Access: 60%

-Consumption/Capita: 386kwh

- Av. GDP Growth Rate: 6.0%

Major Export: Cocoa, Gold,

Timber, Bauxite, Electricity

(Togo & Benin)

Oil & Gas

Overview of Ghana

STAKEHOLDERS IN THE POWER

SECTOR

Ministry of

Energy

Energy Commission

• Advice MoE• Tech. Policy

• Tech. Standard• Prepare Grid Code

• Policy FormulationAnd Direction

VRA ECG

NED

• Produce• Distribute

• Distribute

PURC• BGT • DSC

• DSC

• Regulates Economic tariff• Cust. Serv. Quality

GRIDCO • Transmit

• TSC

Generation Sources

Hydropower Thermal Power

Akosombo–1,012 MW

Kpong – 160 MW

TAPCO (Takoradi I) – 330 MW

TICO (Takoradi II) – 220 MW

Mines Reserve Plant – 80 MW

VRA Tema – 126 MW

ELECTRICITY SUPPLY INFRASTRUCTURE

Bui – 400 MW

Osonor Power – 126 MW

Asorgli Power – 220 MW

Power Barge – 125 MW

Tema 2 Plant – 49.5 MW

Kpone Thermal – 223.4 MW

HISTORICAL BACKGROUNDThe Rural Electrification Committee of 1970 –

Objectives & Recommendations

• Objective was to establish how to bring

electrification to rural areas, as a means of

reducing the urban-rural inequalities and

increase economic activity in the rural areas

Recommendations:

• Rural electrification could not be economically

self supporting at the time

• A rural electrification fund to be set up from ECG

dividends to the government and part of VRA's

surplus to be used for financing the running and

maintenance of electricity systems

Objectives &

Recommendations - Cont• A rural electricity department to be set up within

ECG

• A rural electrification commission under the

ministerial control of the prime minister

• Government to provide subsidy for the supply of

electricity to all towns/villages with population

between 1,000 and 5,000

• To reduce cost, local materials should be used

• Interest on foreign loans for power projects should

be paid into a rural electrification fund

• Communities were to contribute 1% capital cost

Rural Electrification-

The National Electrification Scheme

• National Electrification Policy instituted in 1989to replace the 1970 policy.

• National electrification access was then about25%.

• 46 out of the 110 district capitals existing thenwere connected to the grid.

• Less than 5% rural coverage estimated at thetime.

• National Electrification Levy was instituted andthe levies collected were paid into a NationalElectrification Fund established to supportimplementation of the rural electrificationprogramme.

National Electrification Scheme –Goal and Aims

• Goal of NES is to extend reliable electricity

supplies to all communities over a 30-year

period.

• Aims:

- to enhance socio-economic development

nationwide; and

- to reduce level of poverty nationwide,

particularly in the rural areas.

National Electrification Scheme –Specific Objectives

• Promote use of local and indigenous resources for a cost effective implementation of rural electrification.

• Create employment and increase productivity and wealth.

• Promote growth of agro-based & small scale industries.

• Reduce the rate of rural-urban migration.

• Improve information access and communication services nationwide.

• Improve the quality of life of rural folks.

National Electrification Scheme –Implementation Strategy

• Comprehensive National Electrification Planning Study undertaken between 1989-1991 by Acres International of Canada and Asare-Tsibu & Partners of Ghana.

• Developed a comprehensive National Electrification Master Plan for 4,221 communities.

• All possible options of electrification considered including grid extension and off-grid renewable energy-based solutions such as biomass, solar, wind & small hydro.

• 69 grid-based electrification project packages identified and prioritized for implementation over six 5-year phases major output of NEMP.

National Electrification Scheme –Implementation Strategy (Contd.)

• Connection of district capitals given first priority(64 district capitals in total) and completion ofalready ongoing projects - Phase One

• Subsequent phases prioritized based on:economic, political, traditional & historical factors:

- potential for small-scale industry activity;

- status as commercial market center;

- tourism potential;

- political dispensation; and

- historical importance of area.

National Electrification Scheme –Self-Help Electrification Programme

(SHEP)• SHEP is complementary electrification programme

instituted to support the main NES.

• Rationale: To accelerate the connection ofcommunities to the national electricity grid.

• Introduced by government to encourage (ratherthan dampen) the self-help developmental initiativesof communities.

• Communities that initiate their townshipelectrification projects receive government supportfor completion of the projects earlier than thescheduled date of connection under the NEMP.

SHEP Criteria for joining SHEP

• Community must be within 20 km of an

existing 11kV or 33kV network suitable for

further extension.

• Community must procure and erect all the

low voltage electricity poles required for the

local network.

• Evidence of a minimum of one-third of

houses in the community wired and ready to

receive electricity supply on arrival.

• Community must apply to join SHEP.

FINANCING RE

Name Role

Government of Ghana Consolidated Fund

Levy on consumers

Through Utilities/Agencies

Suppliers Credit

Local Government

Direct through provision of wood poles

MP’s Common Fund

Communities Provision of LV poles & communal labour

Development Partners Bilateral

Multilateral

RE Projects are financed through a mixture of Local

and External Sources (grants and soft loans from a

consortium of financing institutions including the DFIs &

bilateral funding agencies).

Government of Ghana / ECG /

VRA Contributions

Project Cost

(Million)Area Base Period Remarks

Grid Extension to Keta I ¢2192 Volta 11 1990 – 91

Grid Extension to Keta II ¢ 800 15 1992

Juabeso Bia

Electrification Western 41 1992 – 96

Electrification of Volta

Lake Resettlement

Townships

USD 32.8 Volta 144 2002 -2003

Suppliers

Credit from

Chinese Ex-

Im Bank

Bobikuma Electrification ¢ 1178 Central 11 1993 – 95

Agomeda – Kordiabe

Electrification ¢ 77.6 Gt. Accra 8 1993 – 95

Government of Ghana / ECG /

VRA Contributions

Project Cost

(Million)Area Base Period Remarks

Self Help Electrification

Project (SHEP)

SHEP 2 ¢ 2610 National 42 1992 – 94

Emergency SHEP ¢ 4520

Ashanti,

Central &

Volta

50 1994 – 96

SHEP 3 phase 1

USD 130

+ ¢900,000National

170 1996 – 98

phase 2 480 1998 – 2000

phase 3 700 2000 – 2005

SHEP 4 phase 1 & 2USD 45.0

+ ¢270,000National 193 2005 - 2008

MultilateralsProject Donors Area Period

National Electrification Project

- Rural

IDA

USD 77.8M

Western – 97

Eastern – 42

Volta – 56

Gt. Accra – 15

Ashanti – 15

Central – 66

NED/VRA - 155

1993 – 98

Dutch Government

USD 31.0M(40% Grant & 60%

concessionary loan)

Norwegian (Nordic Fund)

USD 6.88M

Swedish SIDA

SEK 68MDanish Govt (DANIDA).

USD 24.35M

GoG(Counterpart fund)

¢2,804M

Western Region Electrification EU €10.0M Western – 108 2002 – 2005

Project Cost

(Million)Area

Beneficiary

Communities Period Remarks

JICA I ¥ 780

Ashanti,

Central &

Gt. Accra

37 1989 – 90

GoG

contribution

¢50M

Lower Volta

Electrification JICA II¥ 1,876

Volta & Gt.

Accra19 1994 – 95

GoG

¢ 561M

Electrification of

Asesewa & Yeji Area

JICA III

¥ 826

Eastern &

Brong

Ahafo

44 1996 – 97 GoG

¢ 503.20M

Electrification of

Nyinahin and

Amansie West

District JICA IV

¥ 890 Ashanti 34 2003 -2004GoG

¢ 7,500M

JICA V Upper

Denkyira & West

Akim

¥1,088Central &

Eastern47 2006 - 2009

GoG

¢ 29,300M

Bilateral

-Japanese Government through JICA

Project Cost

(Mill)Area

Beneficiary

Communities Period Remarks

Volta Electrification

phase 1DM 7.7 Volta 44 1982 – 84

Residual Works Volta

Electrification Phase 1DM 1.0 Volta 16/9

1982 – 84 GoG

¢ 246M

Bilateral

- German Government through KfW

Project Cost

(Mill)Area

Beneficiary

Communities Period Remarks

Eastern Region District

Capital Electrification SEK 52.5 Eastern 22 1994 – 95 GoG

¢465.7M

Ashanti Region District

Capital Electrification US$ 9.98(Finish Gov’t)

Ashanti 52 1993 – 95 GoG

¢ 530.33M

BilateralSwedish/Finish Government through SIDA

Spanish Government

Project Cost

(Mill)Area

Beneficiary

Communities Period Remarks

Upper East

Electrification Project USD10.0

Upper

East 51

1999 –

2000

Project Cost

(Mill)Area

Beneficiary

Communities Period Remarks

Upper East

Electrification Project USD10.0

Upper

East 51 1999 – 2000

BilateralSpanish Government

Project Cost

(Mill)Area Base

Beneficiary

Communities Remarks

Electrification of Jasikan

Kadjebi & othersCAD10 Volta 38 1991 – 92

GoG

¢ 869M

BilateralCanadian Government through CIDA

Project Cost (Mill) AreaBeneficiary

Communities Period Remarks

SHEP I Rp10 National 150 1989 – 93

Government

bears local

expenses

Indian Government

Source of

funding

Beneficiary

Communities

Foreign

(million)

Local

(million)

Bilateral 422 USD 102.58 ¢40,025.23

Multilateral 554 USD 163.03 ¢2,804.00

Government of

Ghana1,865 USD 207.80 ¢1,181,377.6

TOTAL 2,841 USD 473.41¢1,224,206.83

(USD 122.42)

Summary

Capital Cost/ Communities Electrified

•All local currencies were funded by the Government of Ghana

USD 1.00 = ¢10,000.00

Summary

- Capital Cost

Bilateral 18%

Multilateral 27%

Government of Ghana55%

Financing Ongoing RE Projects

Project 2Cost

(Million)Source Area

Beneficiary

Communitie

s

Period

GEDAP Grid

ExtensionUSD 58.40

IDA

ACGF

SECO

ECG

operational

Area

420 2007 – 12

GEDAP

IntensificationUSD 24.60 IDA National 570 2007 – 12

SHEP - 4USD 90

CIWE -1

(Suppliers

Credit)

National 580 2007 – 09

SHEP - 4USD 170

US17(GOG)

CIWE -2

(Suppliers

Credit)

National830

2009 – 12

Financing Ongoing RE Projects

Project 2Cost

(Million)Source Area

Beneficiary

CommunitiesPeriod

SHEP - 4 USD 30 EBIDAshanti,

BA106 2009 – 12

SHEP - 4 EURO 10Eltel Network

(Finland)

Ashanti,

Eastern79 2009 – 12

SHEP - 4USD 5.5

MCA National 45 2008 – 12

SHEP - 4

USD 350

US50(GOG)Suppliers Credit:

US ExIm BankNational 1200 2009 -13

TOTALUSD

7423830

Next 5

Years

KEY CHALLENGIES

• Poverty level of the Rural People

• Inadequate RE levy (0.017 cent/kwh)

• Government Budget Support – inadequate &

not reliable

• Strict conditionalities of Development

Partners

• Lack of Private Capital

• Lack of commitment of the Utilities

WAY FORWARD / CONCLUSION

• Financing RE Projects is a daunting task for

developing countries

• Government Policy Towards Poverty

Alleviation/Wealth Creation in Rural Areas

must be pursued vigorously

• REA and REF must be established

• Local Government, Communities and

Consumers should continue to contribute to

the RE Fund

WAY FORWARD / CONCLUSION

• The RE Levy should be made a percentage

of Energy Consumption

• Government Budgetary Allocation should be

adequate and released timely

• A portion of Utilities profit must be channeled

to the RE Fund

• Development Partners should continue to

assist RE with lesser conditionalities

• Private Investors should be encouraged to

fund RE Projects through franchise/

concession