Energy Development and Access Project (formerly) Development of Renewable Energy and Energy Efficiency

Agency’s Project ID: 
GEFSEC Project ID: 2886
Country: Ghana
Project Title: Development of Renewable Energy and Energy Efficiency
GEF Agency: World Bank
Other Executing Agency(ies): 
Duration: 4 years
GEF Focal Area:   FORMDROPDOWN   Climate Change
GEF Operational Program: OP5 and OP6
GEF Strategic Priority: CC-2, 3
Pipeline Entry Date: August, 2005
Estimated Starting Date: December 2006
IA Fee: 
Project Executive Summary
GEF Council   FORMDROPDOWN   Work Program Submission
Contribution to Key Indicators of the Business Plan:  Increased access to energy service; renewable energy policy framework developed; increased access to local financing for renewable energy and energy efficiency projects; increased number of private entrepreneurs for renewable energy; increased number of ESCOs and energy efficiency projects; 1-2 large-scale grid-connected 50 MW RE projects; 2 small hydro and 8-10 village hydro projects with a total installed capacity of 3.5 MW; 3-5 biomass co-generation plants with a total installed capacity of 5 MW; 1-2 pilot 3-5  MW wind farm; 15,000 solar PV systems with an installed capacity of 450 kW and 500 small wind systems with an installed capacity of 500 kW; 5-10 ESCO projects; and 8 million tons of CO2 emissions avoided over the lifetime of the equipment. 
Record of endorsement on behalf of the Government(s):
  FORMTEXT  (Enter Name, Position, Ministry) 	Date:   FORMTEXT  (Month, day, year) 
E.O. Nsenkyire, Chief Director and GEF Focal Point, Ministry of environment and Science	Feb. 16, 2006
				
Financing Plan (US$)
GEF Project/Component
Project	5,500,000
PDF A
	PDF B
	PDF C
	Sub-Total GEF	5,500,000
Co-financing*  FORMTEXT        
IDA GEDAP	15,000,000
IFC/IDA MSME project	8,000,000
Bilateral
	NGOs
	Private Sector/Banks	134,000,000
Sub-Total Co-financing:	157,000,000
Total Project Financing:	162,500,000
Financing for Associated Activities If Any:                          50,000,000
Leveraged Resources If Any:                                 

GEF Executive Coordinator, World Bank 	Contact Person: 
Christophe Crepin
Program Manager
Date:  March 20, 2006	Tel. and email: 202-473-9727
Ccrepin@worldbank.org

Project Summary
In 2004, Ghana's rural electrification rate reached 54%, significantly higher than the average of 21% of Sub-Saharan Africa. However, the use of electricity by households and small- and medium sized enterprises remains limited. Further push is needed to achieve the Government’s goal to increase access to over 60% by 2012. In addition, the Strategic National Energy Plan 2006-2020 called for a target to achieve 10% of renewable energy in Ghanaian energy mix by 2020. 
There exist many opportunities for renewable energy (RE) and energy efficiency (EE) in Ghana. The cost of rural electrification is increasing, as the outreach is now to communities that are more remote, where off-grid renewable energy technologies (RETs) may offer a least-cost option. Ghana is endowed with rich renewable energy resources from small hydro, biomass, solar, and wind. Many cost-effective energy conservation opportunities exist, particularly in the mining and household sectors. Ghana is undergoing reforms, and has available financing resources from debt relief and a number of donors. 
To date, however, utilization of RE/EE is still limited, except large hydro, due to a number of barriers. The key barriers to RE/EE include a lack of enabling policies and regulations, access to long-term financing, know-how and human capacity, and alternative models to grid-extension for energy access. This GEF project intends to address these policy, financing, information, and capacity barriers to large-scale and cost-effective deployment of RE/EE in Ghana. As a result, the project would increase energy access with a focus on clean energy technologies--RE/EE, which also leads to climate change mitigation impacts.
These expected outcomes are consistent with the Bank’s priorities to increase assistance to Africa and move towards a lower carbon economy, the two main outcomes from the recent G-8 summit in Gleneagles. This GEF project is fully blended with the IDA Ghana Energy Development and Access Project (GEDAP) under preparation. The IDA project is proposed for $65 million and consists of four components: transmission, distribution, access, and capacity building. This GEF project will be part of the access component of the IDA GEDAP project. The total budget for the access component is expected to be around $22 million, of which $7 million is requested for GEF funding to support technical assistance (TA) for renewable energy and energy efficiency, and $15 million would come from IDA to finance grid-extension and renewable energy. Furthermore, the GEF project will also tap $8 million under the IFC/IDA Micro, Small, and Medium Enterprise Project (MSME) in Ghana to increase access to financing for RE/EE developers. 
The global objective of this project is to assist Ghana in mitigating climate change through the reduction of greenhouse gas emissions. The development objective is to provide increased access to affordable, clean, and efficient energy services. The GEF project intends to assist Ghana in establishing an enabling environment of a policy and regulatory framework and providing business support and long-term financing to attract private sector participation in large-scale commercialization of RE/EE. GEF support is requested only for technical assistance to RE/EE, while IDA funding would provide long-term financing to renewable energy developers and consumers, as well as co-financing support to Energy Service Companies (ESCOs) conducting energy conservation projects. It consists of four project components: 1) renewable energy policy framework and RE/EE capacity building; 2) large-scale grid-connected renewable energy; 3) mini-grid renewable energy and Energy Service Companies (ESCOs); and 4) stand-alone renewable energy systems. Consequently, it is expected that an increasing number of local entrepreneurs would be emerged to provide RE/EE services, which would result in increased energy access, improved energy efficiency, as well as reduced greenhouse gas emissions.