Ghana has made tremendous efforts to promote growth and development, and is reported to be on course to achieve the MDG goal of halving poverty in about a year, but is currently facing major energy challenges which could have far-reaching political, social, and economic repercussions.

Several factors account for Ghana's energy problems, and there is now an urgent need for a long-term visionary approach to sector management. The main objective of the Energy Development and Access project is to support long-term efforts aimed at (i) improving the performance of the power companies, (ii) increasing energy efficiency, (iii) scaling-up energy access to reduce inequity due to urban-rural imbalance, and (iv) enhancing renewable energy generation capacity.

"The current energy crisis in Ghana is one of the key impediments to growth," said World Bank Senior Energy Economist and Project Team Leader Paivi Koljonen. "Improving overall sector management, and the access and reliability of electricity supplies are pressing needs for Ghana today, and the Project is designed to address these.v It will also help provide infrastructure that will help in the creation of new business opportunities and the acceleration of "economic growth employment."

In support of Ghana's multi-faceted energy sector strategy, the project will provide grants to developers of renewable energy generation projects - such as small hydropower, wind, and biomass - for the benefit of communities outside the main national grid system.

It will also finance the establishment of an independent Rural Electrification Agency, which will coordinate all rural electrification programs. In all, 134,000 new customers in rural towns and villages will be connected the national power grid by the project's end.