WASHINGTON, D.C., June, 8 2004
— The International Finance Corporation, the private sector arm of the World Bank Group, approved a $60 million loan to finance the expansion of the Takoradi II thermal power generating plant in Ghana, from its current capacity of 220 Megawatts (MW) to 330 MW.
The Takoradi II plant is the country’s first independent power producer. It is owned by CMS Energy (90%), a US energy company, and Volta River Authority (10%), a Ghanaian power utility which is also the off-taker of electricity generated by the plant.
IFC’s board approval reflects an acknowledgment of the efforts of the government of Ghana in undertaking much-needed comprehensive reform of the energy sector and the successful development to date by CMS and VRA of this important project. As well as complementing the corporation’s strategy for Ghana to aid private sector participation in infrastructure development, IFC’s approval also underlines other economic, social, and environmental benefits to the economy by increasing the power generating capacity and reducing the cost of power generated by the Takoradi II plant.
IFC’s $60 million loan is structured in two $30 million loan tranches. The first tranche will help re-capitalize the project to reduce the purchase tariff for the electricity generated by the plant. The second $30 million loan will finance the costs of conversion of the simple cycle power plant into combined cycle operation, which will further reduce the cost of power produced by the facility.
Francisco Tourreilles, IFC’s Director for Infrastructure, noted, “IFC’s financing for the combined cycle phase of the Takoradi II will support a project that is key to improving the availability of reliable and competitive electricity to the Ghanaian population, and critical for the development of the West African Gas Pipeline, for which the Takoradi Power Complex will become an anchor customer.”
Joshua Ofedie, Chief Executive of Volta River Authority, said, “IFC’s investment in Takoradi II will immediately reduce the cost of production from the existing plant. More importantly, the investment will facilitate the conversion of the plant into combined cycle operation which will lead to a further significant reduction in the cost of electricity supply to Ghana. IFC’s confidence in the power sector also has a broader impact in helping to attract private investment in the Ghanaian power sector”.
Thomas Elward, President and Chief Executive Officer of CMS Generation, added, “The IFC Board approval is a step forward for the Takoradi II expansion, which has been in development for several years. This action clears the way for us to work with the government of Ghana and other stakeholders on securing the financing needed for this combined cycle project”.
Note to Editors:
for background information on IFC’s environmental sustainability assessments associated with the corporation’s proposed involvement in the Takoradi II project, see:
Takoradi II Environmental Impact Assessments.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
