Ghana has signed a US$260 million deal with the World Bank to help solve the US$1.2 billion energy sector losses and other inefficiencies.

Under the Energy Sector Recovery Programme, the deal comprises a US$ 250 m credit metering procurement package and a US$10m clean cooking grant component in line with the Bank’s Programme for Results (PforR) initiative.

According to the deal, the World Bank would assist the acquisition of one million meters through competitive bidding, with the clean cooking component receiving an initial 20 percent financing advance.

All of these are linked to goals, such as the most cost-effective transmission of energy generation, transparency in the Cash Waterfall Mechanism, and the lowest possible loss in ECG revenue collection.

It is also expected that there would be a drastic reduction in the country’s metering gap, and the integration of the new metres into the billing system to improve commercial loss.

Speaking at the signing event, Dr Mohammed Amin Adam, Finance Minister, said the government would leave no stone unturned in ensuring efficiency in the energy sector and increasing financial viability by doing things differently.

“The cash waterfall mechanism must be adhered to… and we won’t compromise,” he said and tasked the ECG to ensure that all collections made went into the system and redistributed to beneficiaries to build confidence in the investor community.

“Through this project we have an opportunity to build a robust energy infrastructure that will remain the backbone of a thriving economy. Ultimately, our objective is not to only stabilise our energy sector but also enhance the quality of life for our citizens,” Dr Amin Adam said.

Mr Collins Adomako-Mensah, Deputy Energy Minister, pledged to meet all the timeliness and targets in the project implementation, adding that a team had been established to monitor all beneficiary agencies.

Dr Robert Taliercio O’Brien, World Bank Country Director, Ghana, Liberia, and Sierra Leone, said the programme would help improve energy sector efficiency and financial performance.

He raised concern about US$1.2 billion in sector shortages, which were more than the Bank's typical annual payment to Ghana, and urged compliance with the deal's objectives.

Mr Asjish Khanna, Protective Manager, West and Central Africa Energy, World Bank, noted that the financing arrangement under the agreement would provide better results because it was tied to performance.

“This is better because rather than releasing money not achieving the results, this format of financing ensures that money is disbursed only after the achievement of results,” he said.

“We are asking ECG’s financial accounts audited to be disclosed annually at a particular time every year, once they disclose it in year one, a certain money would be,” he stated.

"Similarly, everyone believes that ECG collection and losses are not optimal, so they set a target for lowering losses. Depending on how much losses are decreased each year, a particular amount of money is released," he continued.

Mr Khanna stated that these efforts were taken to guarantee that Ghanaians felt they had the correct meters for their use, while ECG lowered its fiscal drain, stating that "efficiency in ECG, better service to people."