By Edzorna Francis Mensah
Parliament at its extraordinary meeting on Wednesday, 4th September has approved the controversial $250 million loan agreement for Ghana Energy Sector Recovery Programme (ESRP).
The House has adopted the report of the Finance Committee on the Financing Agreement between the Government of the Republic of Ghana (represented by the Ministry of Finance) and the International Development Association (IDA) of the World Bank Group for an amount of Two Hundred and Fifty Million United States Dollars (US$250,000,000.00) for the Ghana Energy Sector Recovery Programme (ESRP) following expansion to US$90M consultancy fee as part of the agreement.
The House, earlier on 30th July, 2024 rejected the loan agreement based on the fact that, consultancy fee looked scary as raised by MP for Asawase, Alhaji Muhammad Mubarak.
The Minority on the first day of the extraordinary meeting on 3rd September raised issues about the same US$90 and asked the Majority to explain it to rescind the earlier ruling that rejected the loan agreement.
But on the second day of sitting the house was satisfied with the detailed explanation from the Finance Committee that re-worked on the report leading to the approval.
The objective of the loan was to provide funding for the ESRP to support specific activities aimed at reducing the costs of electricity purchases and increasing revenue collection of the distribution utilities.
The World Bank on June 12th, 2024 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 4-year Ghana Energy Sector Recovery Program for Results (PforR) subject to parliamentary approval.
The Bank in its report says, electricity distribution losses are high in Ghana due to a low collection rate and below-cost recovery tariffs, undermining the operational and financial performance of energy utilities in the country as the bank has discovered that, the Government of Ghana transfers about 2% of GDP annually to cover the energy sector’s financial shortfall.
