The World Bank has signed a grant agreement with the government for $4.35 million to support increased electricity access through renewable energy technology for poor households in remote rural regions of Ghana.
The facility is part of the Global Partnership on Output-Based Aid (GPOBA) project, which the bank administers.
The project will draw on funds from the Department for International Development (DFID) of the United Kingdom (UK) and the Swedish International Development Co-operation Agency (Sida).
A statement issued by the bank in Washington, USA, said about 15,000 poor households or 90,000 people are expected to benefit from the scheme, mainly through solar home systems (SHS) and solar lanterns.
The project offers a range of solar Photovoltaic (PV) products (solar cells), the smallest of which can support several lights, a radio, and a black-and-white television for a few hours.
“The GPOBA project will benefit some of Ghana 's poorest residents by targeting remote rural areas, where 60 per cent of the population earns less than $1 a day and the power grid will not arrive for 10 years,” said the World Bank Country Director for Ghana, Mr Ishac Diwan, who is also in charge of Burkina Faso, Guinea, Liberia and Sierra Leone.
“By making renewable energy available to poor households, the GPOBA scheme will contribute both to environmental protection and to poverty reduction in Ghana,” the statement quoted him as saying.
Consumers will make a small down payment at the time of purchase, and will be able to obtain consumer loans from rural banks to pay the rest.
The GPOBA project is part of the larger Ghana Energy Development and Access Project (GEDAP), which is mostly funded by the International Development Association (ODA) and the Global Environment Facility.
GEDAP includes a line of credit to the ARB Apex Bank, the implementing agency for the GPOBA project.
Solar PV systems are one of the cheapest options to provide electricity services in remote and dispersed rural areas, and are increasingly relevant given the current power shortage in the country.
However, most rural consumers cannot afford the initial investment costs of solar PV systems and do not have access to affordable credit.
The GPOBA grant will, therefore, make solar PV systems affordable for poor rural customers by subsidising approximately 50 per cent of the costs.
“Over the long term, the 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,” said the Lead Energy Specialist and World Bank Task Manager for the project, Mr Malcolm Cosgrove-Davies.