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Aide Mémoire : Implementation Support Mission Ghana Electricity Development and Access Project (GEDAP) - P 074191 May 9th – 13th, 2017

1 th th Public Disclosure Authorized The World Bank conducted a mission in Ghana from May 9 – 13 , 2017. The purpose of the mission was to carry out implementation support for the Ghana Electricity Development and Access Project (GEDAP).

The team acknowledges the hospitality and collaboration of the Project Implementation Unit of the GEDAP project in carrying out the mission successfully, with all the proposed meetings with the related stakeholders and overall logistics of the field visits to leader of the PIU, Mr. Andrew T. Barfour. A detailed list of people met is presented in Annex I.

The main activities of the mission were to supervise the operation of the renewable energy component under GEDAP, which has about five mini-grids in operation in towns located on several islands of the Volta Lake. The agenda followed is presented in Annex II.

Public Disclosure Authorized This Aide-Mémoire summarizes the findings and recommendations of the mission. In line with the Bank’s access to information policy, this Aide Memoire will be disclosed as public.

MAIN RESULTS o The mission visited the mini grid projects, which were constructed with the quality equipment with sound warranties, in places of difficult access. The contractors had to manage complex logistics to deliver equipment and materials to the sites, carry out civil works, and overall installation, which they managed well and involved communities as much as possible during different stages of mini-grids construction and installation. o The team met with the beneficiaries of GEDAP (Renewable energy component), and these Public Disclosure Authorized households are receiving electricity for the first time in the remote islands of the Volta Lake region. The beneficiaries expressed their gratitude to the Ghana Government and the World Bank for being part of these pilot projects on access to energy, and for opening new opportunities they had never envisioned before and this has been made possible by the mini grid systems operating since July 2016. o The provision of electricity service has been of good quality and continuous over the last eleven (11) months. This has enabled the communities to abandon kerosene lamps, candles and batteries, and to replace them with newer appliances, such as light bulbs (LEDs), refrigerators, freezers, televisions and cell phone chargers. The payment system is based on a prepaid system managed locally by the contractor, Trama-Techno Ambiental of Spain and local associates, hired by the Ministry of Energy (MOE). The contractor provides operations and maintenance (O&M) support and community interface. The customers pay their

Public Disclosure Authorized electricity bills at the beginning of the month as per their agreed tiered services and have the

1 The mission team was led by Shinya Nishimura (Senior Financial Specialist, Team Leader), joined by the following team members: Kennedy Fosu (Communications Officer), Sunita Chikkatur Dubey (consultant), Demba Balde (Senior Social Development Specialist), and Dante Mossi (Senior Operations Officer, co-Team Leader).

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choice of top-up if the credit runs out before the month ends. The operation would be transferred to ECG or NEDCO once the contract period ends. o Ghana has applied the same universal tariff to the off-grid systems as the grid connected consumers, as a matter of policy. This has left some financial gaps during the first year, which is expected to be covered by the inclusion of new customers above the lifeline value. o The GEDAP team will explore potentially scaling up the mini grid model based on this pilot programs to other island communities and remote communities with the support of IDA and other funding sources that may be available. It is estimated the area holds some 150,000 households, and there are another 150,000 households on inaccessible areas around Lake Volta. If these households gain electricity access, through scale up of mini grid and off grid solutions like rooftop solar, Ghana’s access rate is expected to increase from about 84% to 94%. o The World Bank team also identified below issues and discussed them with the GEDAP team. The World Bank team is of the view that these issues need to be addressed before such scale up could be made feasible:  Electrification Strategy – A clear strategy on how to achieve universal access by 2030 would ensure that we can identify and map what measures and investments are required to achieve that target. The team proposes that the preparation/update of such strategy, utilizing geospatial mapping, be included in the upcoming proposed Technical Assistance loan;  Public vs PPP Implementation Models – The mini grid systems in these communities are financed by concessional funds and owned/managed by the Ministry of Energy. This model would not be feasible if the model is to be scaled up to other communities. The team will support the Ministry of Energy to explore different business models to make the scheme sustainable, including review of the affordability, so that it can be replicated to other energy-deprived islands and remote communities;  Tariff – Application of universal tariff and the lifeline structure resulted in a shortfall of revenue that does not cover cost fully. A sustainable tariff policy and support mechanism should be assessed with the objective of achieving universal access while ensuring operational and financial sustainability.

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I. PROGRESS IN PROJECT IMPLEMENTATION

1. The mission visited four communities in the islands of northern Lake Volta, in the Brong Ahafo and Volta Regions. These remote islands, reachable only by small motorized boats, were created when Akosombo Dam was built in 1965. Lake Volta flooded the area, which in turn cut them from roads and the possibility of grid extension. 2. The trip from to takes about eight hours by car, and a ferry crossing. From this city, it was possible to visit the communities of Aglakope, Atigagome and Wayokope, then the mission traveled to , from where it took another boat to visit the community of Kudorkope.

Figure 1: Area of work

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Table 1: Sites visited

Aglakope Atigagome Wayokope Kudorkope Total Households 116/124 74/70 50/50 161/175 401/419 (Connected/Planned)

Capacity installed 48 KW 22.5 KW 22.5 KW 54 KW 150 KW Commercial users A customer 5 5 expressed interest

New connection Some 10 new 10 new arrivals 12-22 houses 80%, 100% 86 request households to since project since project within the end of be added in the the month expansion of the project

Other 57 percent are literate

3. The communities have been served for about eleven (11) months by the mini grid systems. This project is a pilot within GEDAP, which included a component in renewable energy electrification, with mini-grids and a credit scheme for home solar systems. 4. The mini-grid consists of a solar power plant, battery storage, with a backup generator, and a low voltage distribution line. All homes have prepaid meters, and collection is done locally, with a strict policy of disconnection when credits expire, and penalties for those who attempt some illegal connection. 5. The visit to most of the sites started with a tour of the power plant, where there was an opportunity to meet with the community leaders and beneficiaries. Most of the communities spoke in Dangbe and Ewe, and one in Twi. The economies of these communities are based on fishing, some farming, cattle and trading with the other communities. 6. Benefits. The pilot program has generated opportunities for improved education of children, refrigeration of their fish catch, improved night illumination leading to elimination of fatal snake bites, as well as to develop new businesses such as shops, and dress-making with an upcoming electrical sewing machine and ironing. Another unintended benefit is that some teachers have moved to the islands with uninterrupted electricity service, thus increasing the overall teaching days. The communities and the operator are also discussing the procurement of productive-use equipment such as solar milling machines. 7. Tariffs. The tariff revenue does not cover all the mini-grid’s investment and operation costs. All residential customers are households on the lifeline tariff. It is important to bring in higher-paying customers to generate additional revenues, although in Kurdokope, with the largest system, there are now five new commercial customers. Ideas as bringing telecommunication towers, creating community cooperatives that can pump water for a community faucet for a fee, or fostering the upgrading of the local businesses to commercial rates, were discussed. ECG and

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NEDCo would have to explore these and other models and discuss them in the upcoming when they take-up operations. 8. Operation and Maintenance. The mini-grid assets will be transferred to the utilities Volta River Authority VRA), Electricity Company of Ghana (ECG) or the Northern Electricity Distribution Company (NEDCO) as is the case for all other rural electrification investments in the country. The utilities were all actively involved in the tests and commissioning of the mini-grid systems. It is expected that the final details of the transfer will be ironed out during the upcoming twelve months. 9. Environmental safeguards. The Environmental specialist could not join the mission, but will conduct a desk review by mid-June 2017. The specialist has requested GEDAP team to provide the relevant documentation on safeguard compliance. The mission did note that the land donated by the community for the power plant was chosen not only for the suitability of sunlight, but also avoid or minimize cutting any trees. 10. Last transaction under IDA 47300. The mission discussed that under the first additional financing of GEDAP a review was carried out and found a pending payment which would exhaust all the availability in that credit. In addition, under the second additional financing, all procurement processes had advanced significantly, awaiting awarding from the Bank’s decision whether to extend the project closing date of July 31st, 2017 to January 31st, 2019. The team is processing this request with management. 11. Social safeguards. Overall, the social safeguards rating for the project is Satisfactory based on the observations of the mission and the discussions conducted with community members, project implementation staff, and other stakeholders, such as the Energy committee, which also serves as a Grievance Redress Mechanism. The mission verified that in all the five communities visited, a Memorandum of Understanding between the MOE represented by the Ghana Energy Development and Access Project (GEDAP), the Chief representing the Community and the District assembly was signed to release about 1000 m2 of land for the development of the solar mini-grid electrification system. The beneficiaries donated the land as a partial community contribution to the development of project. A more detailed discussion can be found in the annex IV. 12. Communications and outreach. Given the richness of the pilot program, and the impact of people stories, the Communications Team as part of the mission, collected video footage and pictures of beneficiary testimonies of the impact of the solar micro grids, which can help disseminate the good practice and provide some guidance for future work. The beneficiaries showed an excellent understanding of issues related to the program and called for an expansion to cover new customers and other island communities. The project team and contractors are encouraged to continue with the excellent engagement with the island communities. We recommend that the project team work on showcasing the success story of the mini grid as they work towards scaling up. Some pictures for reference are included in Annex III.

II. Other Issues

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13. ECG audit. The team received the 2015 audit report of ECG during the mission, which was delayed because of the presidential transition, and the Board of ECG which has not been appointed, and which approves the audit. GEDAP expects that the will complete these appointments in the coming two months, and the audit will be delivered. 14. Restructuring. The team has also received the letter from the Ministry of Finance requesting extension of closing date on December 12, 2016, and subsequently for reallocation of funds on April 6, 2017. The team has prepared a restructuring paper, and expect to complete the process by mid-June. 15. Disbursements. In terms of disbursements, the project first additional financing is about to be fully disbursed during the mission, and subject to the extension of the project closing date, the second additional financing will start the awarding process of both technical assistance packages, as well as additional metering contracts.

Table 2: Key disbursement data for the project

Credit Number IDA 43560 IDA 47300 IDA 56290 TOTAL Approved amount $81,159,666.00 $63,083,790.00 $ 58,307,277.00 $202,550,733.00 Cancelled $0 $0 $0 $0 Disbursed $81,148,602.25 $60,806,442.46 $0 $87,235,044.71

Undisbursed $11,063.75 $2,277,367.84 $ 58,307,277.00 $60,595,708.61 Special Commitments $0 $0 $0 Funds available $11,063.75 $2,277,367.84 $ 58,307,277.00 $60,595,708.69 Percent disbursed 99.99% 96.39% 0.00% 43.07% Approval Date July 26, 2007 June 29, 2010 April 30, 2015 Closing Date July 31, 2017 July 31, 2017 July 31, 2017

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III. NEXT STEPS

Activity Responsible Completion Date Agency

Provide approved 2015 audit of ECG GEDAP By July 31st 2017

Finalize pending payments from IDA47300 GEDAP May 31st, 2017

Literature review of assessment of access to electricity WB May 31st, 2017 in the Volta Lake islands

Provide the Bank with project cost details for mini GEDAP May 31st, 2017 grids

Sharing of communications materials from WB June 15th, 2017 stakeholders

Environmental Safeguard review completed and report GEDAP June 15th, 2017 sent for further action PIU/WB

Processing the request for the extension of the project WB June 15th, 2017 closing date

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Annex I: List of officials met Name Institution Role Andrew Tonto Barfour GEDAP Coordinator Henry Vanderpuye GEDAP Access manager Frank Dadzie GEDAP Project engineer Seth Mahu GEDAP Project manager, Renewables Kweku Saforo Sakyi GEDAP Administrative manager Kweku Boafo Ohene Asante GEDAP Environmental officer Pol Arranz TTA Contractor Isaiah Nimako Baah TTA Contractor Shinya Nishimura WB Senior Financial Specialist, Team Leader Kennedy Fosu WB Communications Officer Sunita Chikkatur Dubey WB Consultant Demba Balde WB Senior Social Development Specialist Dante Mossi WB Senior Operations Officer, co-Team Leader

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Annex II: Agenda

Day Time Activity Tuesday 7:00 am Departure from WB Country Office in Accra, and travel to the city May 8th of Kete Krachi in – duration of the trip: 8 hours Stay at Royal Lake View Wednesday 7:30 am Boat to Aglakope – duration of the trip: 2 hours May 9th Visit to community of Aglakope, power station, meeting with beneficiaries. Thursday 7:30 am Boat to Atigagome – duration of the trip: 1 hour May 10th Visit to community of Atigagome, power station, meeting with beneficiaries Continue to walk to the community of Wayokope, to carry out the visit and consultations. Friday 7:30 am Drive from Kete Krachi to Dambai, and visit to Kudrokope. May 11th Carry out field visit and then continue travel by road to . Saturday 7:30 am Travel from Kpando to Accra – duration of travel: 6 hours May 12th

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Annex III: Pictures

Mini grid at Kudorkope Assemblywoman from Mini grid at Atigagome Kudorkope

Mini grid at Aglakope

Stakeholders from Atigagome and Wayokope

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Annex IV: Social Safeguards

1. Objective of the mission. The objective of the social safeguards supervision mission was to review and assess the project’s safeguards risks management and implementation progress since the previous ISM. The Mission undertook field visits to four islands on the Volta Lake and conducted meetings in five communities including Atigagome, Aglakope, Kudorkope, and Wayokope where the project installed solar power houses under the mini-grid component. The community meetings were well attended by a balanced distribution of men, women and youth who freely expressed themselves during the discussions.

2. As a way of background the development of the Volta River in the 60s created about 2000 small islands of which 200 are habitable, but isolated and only accessible by boat. These communities have limited access to social services such as education, health, potable water and electricity.

Update on safeguard activities and key findings from field visits

3. Status of social safeguards implementation: Overall, the social safeguards rating for the project is Satisfactory based on the observations of the mission and the discussions conducted with community members, project implementation staff, and other stakeholders, such as the Energy committee, which also serves as a Grievance Redress Mechanism. The mission verified that in all the five communities visited, a Memorandum of Understanding between the Ministry of Energy represented by the Ghana Energy Development and Access Project (GEDAP), the Chief representing the Community and the District assembly was signed to release about 1000 m2 of land for the development of the solar mini-grid electrification system. The land was donated by the beneficiaries as a partial community contribution to the development of project. There was only one case of complaint filed by a Project Affected Person (PAP) in Kudorkope who felt evicted from the land designated for the powerhouse in which she wanted to develop a piggery farm. The case went beyond the energy committee and taken to court which ruled in favor of the complainant. The chief who allocated alternative space for the Project Affected Person (PAP) has since peacefully resolved the case.

4. The mission learned that 70 households are connected to the power in Atigagome, 116 in Aglakope, 124 in Wayokope, 177 in Kudorkope. Participants in the community meetings reported that connectivity to the mini-grids has had significant impacts in their livelihoods. At the household level, households are using the electricity for lightings, use of TVs, refrigerators, and to some extent for productive purposes at the community level (shops, churches and schools).

5. Beneficiaries reported key advantages: a. connectivity to electricity increased security in the community,

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b. people are moving back to the islands because of the electricity as the feeling of forgotten remoteness of the islands is now being replaced by a positive identification, c. refrigeration of fish, d. One teacher reported that the performance of children in school has greatly improved with even the introduction of computer classes in some of the schools, e. Introduction of new technologies to strengthen agriculture and fisheries productivity, f. The availability of electricity is also triggering the improvement of housing in the communities, g. As one woman said it we now can drink cold water like people in Accra with the advantage of not experiencing “dumsor” (power outage in Akan language).

6. The Mission also observed that the demand for the expansion of the existing mini-grids and the project expansion to the other islands is high as well as for other social services such as water, education, and health.

7. As next step, a follow-up social safeguards mission is suggested in order to assess safeguards issues in relation to the other components of the project.

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