Ghana Grid Company Limited

hold

IFC is considering a corporate loan of up to $170 million to the Ghana Grid Company (“GRIDCo” or the ”company”) to support development of an electrical substation, construction of some 1.5 km of high voltage transmission line and upgrade of 10 km of existing transmission lines. In addition, a portion of the funds will be used to refinance some of the company’s existing debt. GRIDCo is only responsible for construction and operation of substations and high voltage transmission lines i.e., 69-330 kV lines, with the Electricity Company of Ghana (ECG) and Northern Electricity Company (NEDCo) being responsible for construction and operation of transmission lines smaller than this. The company has a total of some 4,400 km of transmission lines of which some 90% are 161 kV lines. GRIDCo supplies electricity directly to several large mining operations and an aluminum smelter, with the ECG and NEDCo supplying electricity to all other users. There are just over 800 people employed at GRIDCo and the company’s headquarters are situated in Tema, an industrial area located adjacent to Accra the capital city of Ghana. In addition, there are warehousing facilities in Tema and 3 vehicle workshops, located in Tema, Takoradi and Kumasi respectively. These workshops provide support to the 314 company owned light and heavy vehicles.The location for the electrical substation to be supported by IFC is located within the confines of the site where the 350 MW Kpone gas-fired thermal power plant is being constructed by the Volta River Authority (VRA), the state owned power generation utility. The power plant is being constructed in Tema. The new section of transmission line will be constructed from the substation to link into the broader GRIDCo transmission network. VRA acquired the land for the power station in the 1970’s at which time it was vacant. However, during the interim period up until construction of the plant started, several subsistence farmers commenced growing crops on the land and several informal residential structures were established. In addition, residential houses adjacent to the site needed to be relocated to accommodate the right of way for the transmission lines evacuating power from the plant. For purposes of the project including the power plant, VRA and not GRIDCo was responsible for land acquisition and resettlement, including the associated compensation. This included extensive consultation with affected communities and an independent valuation was undertaken of land, buildings and crops. On the actual site occupied by the plant 10 individuals were identified as requiring compensation for crops and 2 for purposes of informal settlements on the site. In respect of land required for the buffer zone and transmission lines, a total of sixty seven individuals were identified as requiring compensation by VRA. The power plant will be commissioned in December 2014 and construction of the substation and transmission lines is expected to commence in early 2014. GRIDCo is yet to appoint a construction contractor for the substation and this is being undertaken via a public tender process by suitable qualified companies.