The African Development Bank (AfDB) Group and the government of Ghana have signed a loan agreement for $44 million, to finance the power systems reinforcement project.

The objective of the project is to help Ghana reduce electricity losses, improve the reliability of power supply and expand access to electricity for people living in Kumasi, the second largest city in the country.

The agreement was signed by the vice president of the bank, Mr Mandla Gantsho, for the Bank Group, while Ghana's Ambassador to Tunisia, Mr Lawrence Satuh, signed for his country.

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

The project provides 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 Electricity Corporation of Ghana in Kumasi by the Volta River Authority.

It forms 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.

A statement issued by the bank said 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.

The project, Mr Gantsho said, would be the Bank Group's fourth intervention in Ghana's energy sector after the Ghana-Côte d'Ivoire transmission line, the Brong-Ahafo electricity network and the Ghana-Togo-Benin power interconnection projects.

The first two projects were successfully completed in 1984 and 1994 respectively, while the third project, which was approved in April 2007, is at the loan satisfaction stage.

A Bank Group review of its assistance to the country's power and telecommunications sectors in November 2004 concluded that the first two operations had been very successful in terms of conformity with country-bank policy priorities and sustainability imperatives.

Meanwhile, the AfDB and the Ghanaian government have signed a loan agreement for $63.81 million to finance the Northern Rural Growth Programme (NRGP).

The ADF loan, signed early on,is expected to cover 58.5 per cent of the total cost of the programme, which is jointly being financed by the International Fund for Agricultural Development (IFAD) and the Ghanaian government.

It is 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 Vice President for Sector Operations, Zeinab El-Bakri, welcomed Ghana's decision to reduce regional disparities in its efforts to attain the MDGs, particularly the goal of eradicating extreme poverty and hunger.

The programme, Vice President El-Bakri said, would help community empowerment efforts and increase food production and marketing.

Ghana has, since 1973, received substantial financial and technical assistance from the Bank Group.