International Finance Corporation  IFC, a member of the World Bank Group, has announced that it has signed a Memorandum of Understanding with the Volta River Authority (VRA), Ghana’s national power generation utility, to support private sector investment in Ghana’s power sector.

 The Government of Ghana, as outlined in the Ghana National Energy Policy, has prioritized the increase of installed generation capacity in the country to 5,000 MW by 2016, in order to drive the country’s economic growth. The Government is encouraging private sector investment in the Ghanaian power sector in order to help achieve this objective. IFC and VRA have identified a number of generation opportunities to contribute to domestic power supply in line with the National Energy Policy, and will co-operate with respect to the development and financing of VRA’s generation opportunities. These proposed projects will be developed in partnership with internationally reputable and experienced power generation developers.

 The power plants that are being jointly developed are expected to operate on a lower cost basis to ensure delivery of the affordable electricity to Ghanaians. These plants are also expected to support alternative fuel projects such as liquefied natural gas import solution, and renewable energy projects.

 “IFC is committed to supporting the goals of the Ghana National Energy Policy to increase installed generation capacity over the next few years to meet the growing energy needs of Ghanaians,” said Richard Arkutu, IFC Manager, Africa Special Initiative for Infrastructure. “By partnering with the Volta River Authority, we are able to identify the correct entry points for the private sector to have an impact on the country’s development goals in the electricity sector.”

Chief Executive of  VRA, Kirk Cofie  told JOYBUSINESS this would go a long way to improve the financial position of the Authority to help improve power generation in the country.

IFC’s potential investments will be provided via a number of instruments including early stage project development funding under IFC’s InfraVentures project development fund; equity and senior loan participations; mezzanine and quasi equity participations; and mobilizing risk mitigation instruments such as World Bank Group partial risk guarantees and MIGA political insurance.