Accra, May 30, GNA - The World Bank is to inject 60 million dollars into rural electrification under a new project named Major Ghana Electricity Development and Access Project (MGEDAP).

The project, expected to be completed by October this year aims at subsiding rural consumption of power to make it more affordable to rural dwellers.

Mr Mats Karlson, World Bank Country Director, who was speaking at the opening of the Sixth Energy for Accelerated Economic Growth workshop in Accra said the project was at zero per cent interest rate and that the beneficiaries would have to pay for consumption to ensure its sustainability.

The workshop attracted participants from the Ministry of Energy, Public Utility Regulatory Commission, Volta River Authority, Electricity Company of Ghana, (ECG) Association of Ghana Industries and other stakeholders in the energy sector.

The forum, the sixth in the series will deliberate on the current energy crisis and fashion out a lasting solution to propel the country into a middle-income status considering reliable energy delivery as an important component.

Mr Karlson noted that Ghana had been successful in extending electricity network to the greater part of the country and only needed a boost to complete the exercise, which was crucial for job creation. He emphasized that the World Bank could only invest in rural electrification but would not pay for the consumption, adding that the utility regulatory bodies must ensure that the project was well managed, saying the ECG lost 20 per cent of revenue through bills and 20 per cent through technical inefficiencies.

Mr Kobina Hammond, Deputy Minister of Energy said government, in order to meet future demands in the medium to long term would increase capacity of the Aboadze thermal plant complex from 550 MW to 660 MW, adding, " financial negotiations for this project are at the critical state."

" The Bui hydroelectric project is being developed to produce about 400 MW power by 2009 as well as the construction of a 300 MW thermal plant at Tema by 2007", he added.

The Deputy Minister indicated that the Akosombo Station's Retrofit project had been completed to add 90MW power to the station's installed capacity and the Osagyefo Power Barge docked at Effasu would be made operational to produce 125MW of power.

Mr. Hammond said Ghana was jointly planning a 225 kv high voltage interconnection with Burkina Fasso as a means of providing wider access to generation facilities in different countries and facilitate power exchange between the power stations, adding that this would also allow transfer of power whenever available, to meet short-term power shortages.

He noted that government, together with Nigeria, Togo and Benin were currently implementing the West Africa Gas Pipeline (WAPGP) in order to exploit the vast natural gas reserves of Nigeria for use in other countries.

Mr. Hammond noted that government was also playing a major role in the West Africa Power Pool, which was aimed at pooling together the power generation resources of West Africa states through the interconnection of national power grid system, saying this would harness and optimise the development of power generation resources in the sub-region.

He said the energy sector continued to be saddled with formidable financial challenges as the ECG's indebtedness to VRA continues to mount and that the VRA finances had not been helped by the current high levels of crude oil prices.

Mr Philip Sas, Chairman, Development Partner, Energy Sector called on the government to come out with a coherent, regulatory framework for tariff setting and licensing and selection of local distribution company to ensure that gas from Nigeria was managed in such a manner, that it would be cheaper for industry and other consumers.

He said the power sector reforms were in the right direction and that they were looking forward to how electricity transmission and distribution in the country would be further developed and transformed. Mr Sas assured the support of the development partners in strengthening the energy sector to supply reliable energy to industry, entrepreneurs and private households saying a reliable energy supply is crucial at all stages of the supply chain and therefore an ingredient towards middle-income status. 30 May 06