Takoradi Renewable Energy Ltd.
Project Description
This summary covers an equity investment by Africa Renewables Group of Belgium in, non-shareholder loans by Africa Renewables Limited of the United Kingdom to, and a personal loan guarantee by Mr. Jean-Francois Guillon of France and Mr. David Billon of Côte d’Ivoire for, Takoradi Renewable Energy Ltd. in Ghana. The investors have applied for MIGA guarantees totaling $8.9 million for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project involves the establishment of a greenfield company, Takoradi Renewable Energy Ltd. in Ghana, which will produce biomass from rubber trees in plantations in the country’s western region. The woodchips produced from the trees will be exported through the Takoradi port to European markets for biomass power generation.
Environmental Categorization
The project is a category B under MIGA’s Policy on Social and Environmental Sustainability. Takoradi Renewable Energy Ltd. (TREL) prepared a Preliminary Environmental Report in May 2011, an Assessment Report against High Conservation Values (HCVs) in August 2011 and a Social Impact Assessment in January 2012. The key potential environmental and social risks and impacts are related to soil erosion and runoff, surface water, hazardous substances, fire safety, worker health and safety, community health and safety, and livelihood impacts to charcoal producers. These potential impacts are largely reversible and readily addressed through mitigation measures.
TREL has prepared a Safety, Health and Environment policy, environmental management and monitoring plan, emergency response plan, hazardous and non-hazardous waste policy, and human resources policy. Impacts to livelihoods and other social impacts are expected to be mitigated through a social development plan that includes measures to provide charcoal producers access to an adequate supply of wood residue for source material inputs. TREL plans to rely on the existing community engagement and grievance mechanism of its partner, Ghana Rubber Estates Ltd.
TREL has provided to MIGA an assessment of social impacts. No resettlement is planned. TREL will adopt a practice of leaving wood residue for communities and charcoal producers where it operates. This is anticipated to provide sufficient wood for their needs, in part because in TREL’s planned area of operations rural electrification has reduced reliance on wood and charcoal for household use.
Development Impact
The project will benefit the local community by providing direct additional jobs and alleviating primary forest deforestation. The introduction of biomass to Ghana’s economy will provide new business opportunities. The project would also facilitate the replanting and rehabilitation of rubber trees, thereby improving the projection possibilities of the sector. MIGA’s proposed support is aligned with the first pillar of the World Bank’s Country Assistance Strategy for Ghana, which calls for raising private sector competitiveness through engagements in private and financial sector development, modernization of agriculture, sustainable natural resource management, and investment in infrastructure.
The project is also aligned with MIGA’s commitment to supporting investments in countries eligible for concessional lending from the International Development Association and South-South investments. It would be underwritten through MIGA’s Small Investment Program.