Ghana Parliament approves $25.9m IDA financing agreement for ECOWAS power pool project
Ghana’s Parliament on Wednesday approved a Financing Agreement between Ghana and the International Development Association (IDA) for $25.9 million to finance the West Africa Power Pool (APL3) programme.
The loan would be committed to the construction of a 225-kilovolt transmission line interconnection and associated substations in Ghana and Burkina Faso, as part of the first phase of the World Bank-backed Inter-Zonal Transmission Hub Project of the APL3 programme.
The project is expected to facilitate the collective decision of ECOWAS Member States to develop and put in place the West Africa Power Pool (WAPP), aimed at integrating national power system operations into a unified regional electricity market, to assure citizens of the regional economic bloc of stable and reliable electricity supply at affordable cost.
Based on an ECOWAS Energy Strategy, the first phase of the project, under the West Africa Power Poll APL3, is designed to curb imbalances between domestic energy resources and the needs of Member States with specific emphasis on Burkina Faso.
The proposed transmission line will significantly reduce the cost of electricity supply in Burkina Faso and facilitate future unconstrained electricity exchanges across West Africa Power Pool zones, as well as financial benefits to Ghana, due to increased revenue from power sales.
The loan facility, which has a grace period of 10 years, maturity period of 35 years and repayment period of 25 years, attracts a commitment charge of a maximum of 0.5 per cent per annum on withdrawn balance and a service charge of 0.75 per cent per annum on interest rate.
It would be applied to specifically four areas including a 225 KV transmission line between Bolgatanga and Ouagadougou, reinforcement of transmission grid in the northern part of Ghana, electrification of rural localities along the right of way of the project, supervision of construction works, capacity building and institutional support to the Ghana Grid Company and SONABEL.
SONABEL is the main power distributor in Burkina Faso.