The World Bank has disclosed that it has been made aware of allegations surrounding the operation of the Development Bank Ghana, a beneficiary under the Ghana Development Finance Project supported by International Development Association (IDA).

“We take all fiduciary issues very seriously and we are engaging key partners to obtain full clarifications”, a short statement from the bank said.

The Vice President of Imani Africa Bright Simons recently alleged that funds allocated to the Development Bank Ghana had not been well utilized.

Mr. Simons outlined serious issues with the capitalization of the bank, arguing that over 400 million cedis had been lost through improper contracting.

DBG denied claims of misusing funds allocated for operations

The Development Bank Ghana refuted claims that it misused funds allocated for its operations by the country’s development partners.

In a statement, the bank rejected media reports containing what it calls “significant inaccuracies and falsehoods” about its activities, stating that these undermine the institution's commitment to transparency and Ghana’s economic transformation.

DBG clarified that it was initially capitalised with GH¢1.135 billion (approximately $200 million at the time) by the Ghanaian government in 2021, with additional funding from the African Development Bank.

The bank rejected claims that it misappropriated over GH¢400 million, emphasizing its stringent procurement policies. In a statement released on November 13, DBG noted, "Our procurement processes remain stringent, rigorous, and evolving in line with best global practices.”

Furthermore, DBG disputed assertions that it incurred GH¢700 million in losses, instead highlighting consistent annual profits since its inception, including GH¢80.1 million in 2023.

They also countered allegations about misuse of World Bank and European Investment Bank funds, noting these credit lines are strictly monitored and used exclusively for on-lending through financial institutions.

What is the IDA?

The IDA is the part of the World Bank that helps the world's low-income countries.

IDA's grants and low-interest loans help countries invest in their futures, improve lives, and create safer, more prosperous communities around the world.

World Bank approves $250m for Ghana

On June 18, 2024  the World Bank  approved a $250 million credit from the IDA and an additional $10 million grant from the Energy Sector Management Assistance Programme, to support a 4-year Ghana Energy Sector Recovery Programme for Results (PforR) to improve the financial viability of electricity distribution and increase access to clean cooking solutions.

The PforR will provide financing directly to energy sector utilities to implement capital expenditure programs and complement regulatory and policy reforms of the energy sector supported under the World Bank’s Development Policy Financing series and the ongoing IMF Extended Credit Facility Programme for Ghana.

The Clean Cooking Component of the Programme will increase the access of Ghanaian households, schools, and businesses to Liquified Petroleum Gas for domestic and commercial use. The PforR will provide direct incentives to subsidize the cost of stoves and accessories.

The ESRP is expected to provide a wide range of benefits to consumers which includes market development, affordability, energy access and equity, health and environmental protection against air pollution and associated health risks.

Robert Taliercio, World Bank Country Director for Ghana, Liberia, and Sierra Leone said, “Through this important results-based financing, the World Bank is committed to supporting the recovery of Ghana’s energy sector and its financial sustainability. The operation aims to strengthen revenue collection and improve the quality of energy supply through investments in prepaid metering and in the commercial and meter management systems of distribution utilities,”.

Minister for Finance, Dr Mohammed Amin Adam also said, “ the Government of Ghana is grateful to the World Bank for their support in the attainment of the Sustainable Development Goals (SDGs), particularly Goal 7 (Affordable and Clean Energy). Our quest to achieve financial viability in electricity distribution and increasing access to clean cooking solutions is essential for building sustainable energy systems that support economic development, improve public health, and protect the environment while promoting energy access and equity for all”.

He continued that “our access to sustainable energy is not just about powering homes and businesses, it's about empowering communities, protecting the environment, and fostering inclusive and sustainable development”.

The Energy Sector Management Assistance Programme provides knowledge, technical assistance, and advisory services to help countries enhance their institutional capacity and implement sustainable energy solutions.