WASHINGTON, June 12, 2024 – The World Bank has approved a $250 million credit from the International Development Association (IDA) and a $10 million grant from the Energy Sector Management Assistance Program for a four-year Ghana Energy Sector Recovery Program for Results (PforR). This initiative aims to support Ghana’s Energy Sector Recovery Programme (ESRP) by enhancing the financial viability of electricity distribution and increasing access to clean cooking solutions.
Electricity distribution losses in Ghana are significant due to low collection rates and below-cost recovery tariffs, which undermine the operational and financial performance of energy utilities. The Government of Ghana allocates approximately 2% of GDP annually to cover the energy sector’s financial shortfall.
“Through this important results-based financing, the World Bank is committed to supporting the recovery of Ghana’s energy sector and its financial sustainability. The operation aims to strengthen revenue collection and improve the quality of energy supply through investments in prepaid metering and in the commercial and meter management systems of distribution utilities,” said Robert Taliercio, World Bank Country Director for Ghana, Liberia, and Sierra Leone.
The PforR complements regulatory and policy reforms supported under the World Bank’s Development Policy Finance series, such as the IDA-supported First Resilient Recovery Development Policy Financing operation approved in January 2024, as well as the ongoing IMF Extended Credit Facility Program for Ghana. The PforR focuses on institutional capacity improvements and accountability while providing financing directly to energy sector utilities for capital expenditure programs.
“The PforR aims to reduce the cost of electricity service provision by improving economic dispatch of generation and by strengthening commercial and operational performance of distribution utilities,” said Dhruva Sahai, Program Leader for Infrastructure.
The Clean Cooking Component will increase access to Liquified Petroleum Gas (LPG) for domestic use among households, schools, and businesses. The program will provide direct incentives to subsidize stove costs—excluding cylinders—for first-time domestic users, commercial caterers, and second-cycle schools. These efforts aim to enhance women’s access to clean cooking solutions, reduce time poverty, mitigate health risks from smoke exposure from charcoal stoves, and improve women’s income-generating opportunities.