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21.10.2008 Business & Finance

About 90,000 rural dwellers in Ghana to have access to solar power

By gna

About 90,000 dwellers in remote parts of Ghana are to enjoy solar power under a Global Partnership on Output Aid (GPOBA) programme that the World Bank is administering.

The Bank has signed a grant agreement with the Government for 4.35 million dollars to support the programme, which would increase poor households' access to electricity through the provision of renewable energy technology in rural areas of Ghana.

A release from the World Bank Office in Accra made available to GNA on Tuesday, said the technology would mainly be through solar home systems (SHS) but would also include solar lanterns.

The project would offer a range of Solar Photovoltaics (PV) products, which even on the smaller end; can support several lights, radio and black and white TV for a few hours.

Mr Ishac Diwan, World Bank Country Director for Ghana, Burkina Faso, Guinea, Liberia and Sierra Leone, said: "The GPOBA project will benefit some of Ghana's poorest residents by targeting remote rural areas, where 60 per cent of the population earn less than one dollar a day and the power grid will not arrive for 10 years."

He said: "By making renewable energy available to poor households, the GPOBA scheme will contribute both to environmental protection and to poverty reduction in Ghana."

Solar PV systems are one of the cheapest options to provide electricity services in remote and dispersed rural areas and are increasingly becoming relevant, given the current power shortage in Ghana. However, most rural consumers cannot afford the initial investment costs and do not have access to affordable credit.

The GPOBA grant would make solar PV systems affordable for poor rural customers by subsidizing approximately 50 per cent of the costs.

But in line with the output-based approach, most of the GPOBA subsidy would be paid only after services have been delivered and verified by an independent agent.

Consumers would make a small down payment at the time of purchase, and would be able to obtain consumer loans from rural banks to pay the rest. Consumer loans would be made more accessible because the GPOBA scheme is part of the larger Ghana Energy Development and Access Project (GEDAP), which is mostly funded by the International Development Association and the Global Environment Facility.

GEDAP includes a line credit to Ghana's ARP Apex Bank, the implementing agency for GPOBA project, as well as measures to help to develop the market for solar PV systems in remote areas.

Mr Malcolm Cosgrove-Davies, Lead Energy Specialist and World Bank Task Master for the Project, said: "Over the long term, GPOBA project is expected to demonstrate a viable business model for dissemination of solar PV that the Government of Ghana could continue to support, for instance through the National Rural Electrification Fund.

The GPOBA project would draw on funds from the United Kingdom's Department for International Development (DFID) and the Swedish International Development Cooperation Agency.