Parliament approves loan to upgrade Ghana's energy distribution systems
Accra , March 20, GNA - Parliament on Tuesday approved a Buyers Credit Agreement between Ghana Grid Company Limited (GRIDCo) with the Government as guarantor and Societe Generale/COFACE of France for 34,054,465.08 Euros for infrastructural upgrade.
The facility would enable GRIDCo finance its Substations Reliability Enhancement Project (SREP), intended to upgrade the operational reliability of its equipment at the Bulk Supply points by replacing identified obsolete and faulty components of the transmission network that are contributing to unreliable and low power quality in its network.
The loan which has a repayment period of 10 years, a maturity period of 12 years and a grace period of two years, attracts an interest rate of 1.75 per cent per annum, and arrangement fee of one per cent and a commitment fee of one per cent per annum. GRIDCo would also raise a counterpart funding of 5,484,723.55 Euros being 15 per cent of the loan.
Mr James Klutse Avedzi, Chairman of Finance Committee, who recommended to the House to approve the loan, said government, as a major policy objective, intended to increase the installed capacity of Ghana's general electricity capacity from the current level of about 2,000 megawatts to about 5,000 megawatts by 2015.
He said the policy directive required an accelerated effort of reinforcement and expansion of the electric transmission grid to ensure reliable and secure evacuation of all the power that would be generated to meet increasing customer demand.
Mr Avedzi said government intended making Ghana a net exporter of electric power to her neighbours including Togo, Benin, Cote d'Ivoire, Burkina Faso, Mali and Nigeria.
He said the export driven policy required the strengthening of existing institutional capacity in electric power dispatch and control, market operations, engineering and project management functions of GRIDCo.