Ghana brightens up economic prospects after securing solar tech deal
Ghana recently signed a grant agreement with African Development Fund and the government of Switzerland to support development of mini-grids and solar PV net metering.
According to a statement released by the African Development Bank (AfDB), the government of Ghana also signed a financing agreement with the government of Switzerland, for the Ghana Mini Grid and Solar Photovoltaic Net Metering project.
The agreements cover the development of 35 mini-grids and stand-alone solar PV systems targeted at the healthcare and education sectors.
They were signed by Ghanaian Finance Minister Ken Ofori-Atta, chairman of the board of governors of the AfDB Group, Ambassador Dominique Paravicini, the African Development Bank Group’s governor for Switzerland and Dr Akinwumi A. Adesina, president of the AfDB.
Stakeholders believe the project will support Ghana’s COVID-19 Alleviation and Revitalisation of Enterprises Support (Ghana CARES) program, which identifies the energy sector as an enabler of economic transformation.
Minister Ofori-Atta said the agreement demonstrated his government’s commitment to enhance the economic and social viability of low carbon investments and achieving energy efficiency.
Ghana’s electricity access rate is currently at 87.13% the minister revealed. The last mile was often the most expensive and difficult, he noted.
“Today’s event not only marks the first stage but marks an important milestone for providing climate conscious development across the country,” Ofori-Atta said. “It is truly important and significant for us as we move toward net zero.”
Ambassador Paravicini said: “We hope that, together, this project will bring sustainable and affordable electricity to over 6,000 small and medium-sized enterprises and almost 5,000 households, besides 1,100 public buildings.”
Dr Adesina said: “The Bank supports Ghana’s efforts in building resilience to the socio-economic impacts of the COVID-19 pandemic by providing electricity to health care centres, schools and island communities, currently without access to electricity services, thus enabling refrigeration of vaccines and testing facilities in these communities.”
The government of Switzerland financing will specifically support the scale up of the existing Ghana net metering program and deploy up to 12,000 units of roof-mounted net-metered solar PV systems for SMEs and households.
Solar cells, also called photovoltaic (PV) cells, convert sunlight directly into electricity.
The systems will power 750 SME, 400 schools, 200 health centres and the energy service systems in 100 communities in the Volta Lake region and Northern region of Ghana.
The Ghana Mini Grid and Solar Photovoltaic Net Metering project is expected to have an annual electricity output of renewable energy estimated at 111,361MWh, corresponding to an installed capacity of 67.5MW. The project will mitigate greenhouse emissions of 0.7795 million tons of CO2 equivalent per year and create up to 2,865 jobs during construction, of which 30% will target women and youth
According to the stakeholders, the overall project cost is estimated at US$85.88-million comprising the mini grid component - US$40.29-million, and a US$44.89-million net metering component.
It will be financed through US$27.39-million from the African Development Fund; Ghana government counterpart funding of US$16-million; and US$14-million from the Swiss government.
In addition, the AfDB as an implementing entity of the Climate Investment Funds, leveraged concessional financing of US$28.49-million.
According to AfDB research, Ghana has enjoyed two decades of steady growth, but the impact of COVID-19 and the Ukraine-Russia crisis could dent economic prospects.
A report by the organisation, ‘Transforming Ghana,’ reviews the country’s development over the past ten years (2012–2021), Ghana’s GDP per capita grew 2.3% per year on average between 2012 and 2021, with the country’s stable political environment cited as a reason.
Real GDP growth averaged 5.2% during the same time, causing the country to rank among Africa’s fastest-growing economies for several years. Having achieved lower-middle income status in 2010, the population living below the poverty line fell from 24.2% in 2012 to 10.7% in 2021.
“With regards to the High 5s, the Bank’s track record is impressive. In the period under review, 96,200 people gained access to electricity connections, thanks to Bank-funded projects. A further 520,000 benefited from improvements in agriculture. Around 1.24 million people have enjoyed better transport services, and 277,000 people gained access to new or improved water supplies, among other achievements,” the AfDB stated.
“Looking ahead, the medium-term outlook is positive, with the economy projected to grow by 5.3% in 2022 and 5.1% in 2023. This may change if the Ukraine-Russia crisis is prolonged, the report found. It said the Covid-19 pandemic and the Ukraine-Russia crisis have accentuated the need for structural transformation, citing declining mineral resources,” it added.