About 100,000 inhabitants in nine regions of Ghana, were introduced to solar energy solutions, including 18,585 remote school students. Energy solutions were also brought into rural health centers, with the impact of reduced use of carbon based fuels such as kerosene or firewood, and paving the way for a less carbon-intensive economy.
Rural areas of Ghana face a gap of access to service provision due to the geographical remoteness, high cost of grid connection, low ability to pay for services, and limited access to providers of renewable energy solutions.
To address these challenges, the Ghana Energy Development and Access Project (GEDAP) considered different technologies that were sustainable and affordable, including the use of micro hydroelectric and wind, among others. The project identified the use of mini-hydro and wind generation, which were later changed to all solar, to take advantage of the economies of scale and simplicity in its maintenance to make it affordable and resilient. Once identified, the project assisted in creating a new legal and regulatory framework for renewable energy, and initiated efforts to develop the local market of service providers as well as support access to financing with local financiers. The enactment of the Renewable Energy Law supported the activities of other donors who are now actively working on this issue. Also, the use of output subsidies to poor households provided adequate and targeted capital to address the issue of affordability in the program. To accommodate these changes, the World Bank responded flexibly by restructuring the Global Environment Facility (GEF) and the Global Partnership of Output-Based Aid (GPOBA) components multiple times, to reflect the learning experience during implementation and meet the demands/needs of the beneficiaries. GEDAP also included five pilot mini-grids using solar energy to provide electricity to isolated communities in islands created by the Volta Lake and the Volta River, which introduced prepaid metering to address the issue of payments.
Specifically, the five pilot mini-grids provide 24/7 electricity to about 10,000 beneficiaries for the first time, allowing these fishing communities to use electricity to improve their livelihoods. The project was commissioned on November 2017 by the Ministry of Energy, and the communities are now enjoying of other productive uses of electricity, such as public illumination, creation of small businesses, and lighting for schools.
Bank Group Contribution
Currently IDA has contributed to the program GEDAP $220 million, and this program was supported by the $5.5 million grant from GEF to introduce renewable energy in the market and to facilitate impact for the poor, the GPOBA also provides an additional grant of $4.55 million. The GEDAP program coordinated all implementing activities with all the stakeholders, including rural banks, rural communities, and retailers of renewable energy products with the overall government structure to ensure required legislation.
The program worked closely with other initiatives explored by donors, in particular with the UN System, to obtain lessons learned from other pilot activities to generate sustainable solutions. In addition, the Project is co-financed by Swiss Economic Cooperation Organization (SECO) and African Development Bank (AfDB).
The program in Ghana took additional measures to ensure that the legal and regulatory framework was set up to enable the development of this nascent industry of renewable energy. The system that were set up under this Project is now contributing to other donors such as SECO and AfDB who continued working on additional programs on access and renewable energy. It is expected that in the future, the learning generated by retailers, the financial system, and more importantly, the wider population, create the incentives for additional and stronger private sector participation in the sector. IDA is processing a new technical assistance credit to support the enabling framework to make mini grids financially sustainable, with the support in regulation from the Ministry of Energy, Energy Commission and the Public Utility Regulatory Commission.
The mini-grid has given Agatha Abotchie, a seamstress in Aglakope, one of the Volta Lake Islands the opportunity to work during evening hours. Prior to the project, she sewed without electricity. Now she can sew at night, and is also able to use an electric iron, which makes her work neat and presentable for her customers. Agatha is intending to buy a motor to turn her manual sewing machine into an electric one, speeding-up the pace of her business.