Environmental and Social

(E&S) Risk Management

Sector-Specific Guidance
Power and Energy
Preamble to All Sector Specific Guidance
While the guidance notes to the Principles provide high-level, all-sector
guidance on the purpose and implementation of (and additional resources
for) each Principle, some sectors represent higher environmental and
social risk and require greater scrutiny. Therefore, we have provided
sector-specific guidance notes, to assist with the implementation of the
Principles in these high-risk sectors. These notes draw upon the IFC
Environmental, Health and Safety Industry Sector Guidelines and the
EBRD Subsectoral Environmental and Social Guidelines and have been
adapted to reflect the Ghana-specific context.
 Index

Power and Energy in Ghana 4

Summary of Key E&S Issues 6

Potential Costs Associated with Key E&S Issues 7

Analysis of Key E&S Issues 8

Key E&S Opportunities 20

Due Diligence Questions for Clients 21

7 Performance indicators
Key 22

Sources of Additional Information 23

Power and Energy in Ghana

Power and Energy in Ghana Relevant regulations in the Power For small scale solar solutions, the
and Energy sector Energy Commission runs a rooftop
The Power and Energy sector in solar programme where homes and
Ghana is central to the supply of The Energy Commission is the
small businesses can apply to
electricity to people and businesses technical regulator of Ghana’s
receive a capital subsidy to cover
around the country. Electricity is electricity, natural gas and renewable
the cost of photovoltaic (PV)
generated at various power plants energy industries, and the advisor to
panels. The aim of this is to lower
around the country and then Government on energy matters. This
the daily national peak load by
distributed to users via a power was created by an act of parliament
200MW. It provides an alternate
transmission network (also known The Energy Commission Act, 1997
source of electricity if there are
as a grid) and a distribution (Act 541)
problems with electricity supplied
network. Most of Ghana’s total The Public Utilities Regulatory by the grid. An increasing number
power is generated by hydro and Commission Act, 1997 created the of Ghana’s island communities are
thermal power plants, comprising Public Utilities Regulatory Commission benefitting from the technology,
42.7% and 57.1% respectively. (PURC). This entity regulates the where off grid solar-diesel hybrid
Recent investments have meant provision of utilities in Ghana. It covers systems provide access to
that 0.04% of Ghana’s energy in all aspects of utility provision and electricity for the first time. It is not
2016 was generated through solar ensures the fair provision of services economically viable to connect
technology. to consumers. Given the unbundled these areas to the national grid, but
The power sector in Ghana is structure of the power generation, the mini-grid solutions provide a
unbundled. This means that the transmission, and distribution sectors, reliable source of electricity that can
various functions of power different regulations apply to the be used for both personal and
generation, transmission and different components of this sector. business activities, boosting island
distribution are performed by The National Energy Policy 2010 is the economies. The Renewable Energy
separate entities to ensure quality underlying policy guiding Act 2011 (Act 832) (the Renewable
power supply. These entities are governmental actions and strategies in Energy Act) is the energy-related
headed by the Ministry of Energy. the power and energy sector. legislation geared towards the
encouragement of Ghana’s drive to
The Electricity Company of Ghana The Energy Commission issues
boost the renewable energy sector.
distributes electricity mainly in the licences to the different bodies
southern sector of the country engaged in the supply of electricity. Finally, The Environmental
whiles the Volta River Authority is This serves to improve capacity and Protection Agency Act 490, 1994
responsible for the northern sector.. service delivery while holding allows the Ghana Environmental
operators to the terms of their licence. Protection Agency to request an
It is through this licensing system that Environmental Impact Assessment
capacity is added to the network. The from any company undertaking a
Commission launched the National project, clearly setting out the
Electricity Grid Code in 2010. It lays impacts of the project on the
out the technical standards and environment. This could apply to
requirements for the electricity power generation projects: for
distribution network including its safe instance this was the case for the
management and other relevant construction of the Bui
issues. Complementary to this is the Hydroelectric Power Project.
National Electricity Distribution Code
that sets out the minimum acceptable
technical standards of the electricity
distribution network, as well as other
standards relating to the safe and
reliable operation of the electricity
distribution network.

Bank of Ghana | Power and Energy | 4

Power Generation Solar Power Plants and other Transmission infrastructure has
Renewable Energy: Photovoltaic suffered from a lack of investment,
Thermal Power Plants: Thermal
(PV) panels, also known as solar which has led to some inefficiencies.
power plants burn fuels to produce
panels, provide a renewable source of In 2015 transmission losses as a
heat, which is turned into electrical
electricity. As stated above, solar percentage of gross transmission was
energy through a variety of methods: a
comprises a tiny portion of energy at 3.8%, this represents a decline from
steam turbine, a combustion turbine, a
generation in Ghana at present. previous years and the lowest level
combined cycle gas turbine (CCGT),
However, this is likely to change as since 2010.
an internal combustion engine or a
Ghana looks to solar as part of the
cogeneration system. The majority of Off-grid electricity, in particular solar
solution in its struggle to meet growing
thermal power plants in Ghana burn powered off-grid electricity, has the
electricity demand. Ghana is well
oil or natural gas. In 2015, 44% of potential to become an important part
poised to increase the amount of
natural gas for power generation was of the supply in the future.
power generated through solar
supplied by Nigeria via the West
means, as the country is located very
African Gas Pipeline (WAGP), which
close to the equator and receives
was the first regional natural gas Growing demand and the stability
large amounts of sunlight. For
transmission system in sub-Saharan of electrical supply for the
example, Accra averages more than
Africa. The remaining 56% came from economy
150 hours of sunshine a month. The
the Atuabo processing plant, which is
Navrongo Solar Power Plant is owned In Ghana, electricity demand remains
located in the Western Region of
by the Volta River Authority (VRA) and high, growing at 7% a year on average
Ghana. Thermal power plants are
first delivered electricity in 2013, with over the last ten years. The power
usually connected to a grid for
a modest capacity of 2.5 MW. The sector is essential to economic growth
distribution, but smaller scale plants
BXC Company solar plant came but the World Bank has identified that
may be isolated from the national grid
online in 2016 with a more significant lack of access to electricity is one of
for specific purposes such as
20MW capacity. In 2016, fifty-five the most significant constraints to
powering a factory.
provisional wholesale electricity business in Ghana. This is illustrated
Hydro Power Plants: Hydroelectric supply licences and two construction by the fact that Ghana’s 2007 power
or ‘hydro’ power plants usually involve permits were issued. crisis led to the country losing 1.8% of
building a dam across a river to create its GDP.
Other renewable energy proposals
a reservoir. Ghana’s hydro power is
have been granted licenses as Ghana Economic growth in Ghana continues
supplied by the Kpong Dam, the
looks for a diverse range of solutions to increase demand for electricity.
Akosombo Dam and the Bui Dam.
to meet the growing demand for Ghana has been increasing its
While hydro plants provide a more
electricity. installed capacity, especially in
reliable electricity supply than other
thermal power generation. To ensure
renewables such as wind, they are Power Transmission and
security of supply in the future,
vulnerable to natural factors such as Distribution
Liquefied Natural Gas (LNG) and
levels of rainfall. Rainfall in Ghana can
Power transmission in Ghana is nuclear power could begin to play a
be unpredictable and in recent years,
managed by Ghana Grid Company larger role in the energy mix.
Ghana has received below average
Ltd. (GRIDCo), which operates the Construction has started on a LNG
rainfall. As a result, the country’s
National Interconnected Transmission terminal in Tema, which is expected to
hydro power plants have not been
System (NITS). Ghana’s transmission produce 3.4 million tonnes of LNG
able to operate at their predicted high
grid comprises more than 4,000km of annually. Ghana has completed the
capacity.
high voltage transmission lines and 53 first of the three phases of the
transformer/ switching stations and is International Atomic Energy Agency
interconnected with the electrical (IAEA) required milestones, which
network of Côte d’Ivoire. every country has to complete prior to
developing a national infrastructure for
Two companies are involved in the
nuclear power.
distribution of electricity: The Northern
Electricity Distribution Company
(NEDCo) and the Electrical Company
of Ghana (ECG). There is an
extensive distribution network in
Ghana, which serves approximately
72% of the total population. However,
access to electricity in the three
northern regions is only about 30%.

Bank of Ghana | Power and Energy | 5

Summary of Key E&S Issues

ESG Risk category key

Key risks Power & Energy
Environment – Affects the
natural environment Fire and explosion

Health and safety – Affects the Air emissions

health and safety of employees
Electrical safety
Labour – Affects workplace
conditions and treatment of Hazardous materials
employees
Occupational health and safety
Community – Affects the health
and safety, livlihoods and Soil and surface water contamination
environment of the community
and wider public Habitat Loss and Biodiversity

Electromagnetic fields (EMF)

Note:
Community engagement
Key risk ordering based on significance
of the potential financial impact to the Labour rights
company in question.
Visual impact

Cultural heritage

Bank of Ghana | Power and Energy | 6

Potential Costs Associated with Key E&S Issues

Potential costs to banks’ clients associated with key E&S issues

Fines from regulatory Fines from regulatory Fines from regulatory

authorities, or third party authorities or third party authorities or third party
claims for fatalities and claims for clean-up/ claims for impacts to natural
injuries to employees or local remediation costs associated capital resource.
communities due to accidents with environmental impacts.
or exposure to toxins.

  

Reputational damage leading Potential capital expenditure

to protests and increased required to meet
operational costs. environmental and labour
conditions attached to
operating licenses.

 

Potential costs to banks’ credit portfolios associated with key E&S issues

Any of the above costs to

clients could cause a client’s
operations to be suspended

This may impede the client’s

cash flow, potentially leading to
credit default

This may lead to a potentially

significant loss in revenue for
lending banks

In order to protect themselves, banks should consider including, in loan documentation, environmental and
social Conditions Precedent, Warranties, Covenants and Events of Default.
Please see the Guidance Note associated with Principle 1 for further details.

Bank of Ghana | Agriculture and Forestry | 6

Analysis of Key E&S Issues

Fire and Explosion

Many aspects of the power and

energy sector can pose fire and Risk Management
explosion risks. As the majority of Client companies should implement the following risk management practices:
thermal power plants in Ghana burn
oil or natural gas, these plants will • Ensure that power generation • Ensure that appropriate
store and burn large volumes of these facilities are designed, emergency procedures are in
fuels, which are highly flammable. constructed, and operated place in the event of an accident.
Furthermore, trees and other according to the latest local This includes establishing
vegetation can interfere with Ghanaian regulations (and suitable communications with the
transmission lines which, depending international standards, where appropriate local emergency
on weather conditions can lead to appropriate) for the prevention authorities.
forest fires if left unchecked. Major and control of fire and explosion
• Ensure all staff have been trained
accidents from explosions, fires and hazards.
on safety procedures in the case
forest fires can lead to fatalities, • Monitor vegetation in power of a fire or explosion emergency.
injuries, and production downtimes. transmission corridors in order to
They can also lead to detrimental minimize risk of fallen trees and
impacts to the surrounding other interference from
environment and nearby infrastructure vegetation.
which can negatively affect local
populations. • Ensure that equipment
undergoes scheduled inspection
and maintenance activities and
The Ghana National Fire Service Act, meets international standards of
1997 (Act 537) provided the regulation operational performance in order
for the management of undesirable to avoid failure.
fire and explosion in the sector. This is
guided by the Fire Precaution
(Premises) Regulations 2003, LI 1724
which makes it obligatory for
certain premises to have fire
certificates to meet fire safety
standards.

Bank of Ghana | Power and Energy | 8

 Air Emissions

Thermal power generation has the Risk Management

potential to release the following as air
emissions: Client companies should implement the following risk management practices:

● Carbon dioxide (CO2) – a • Adhere to all air emissions related conditions attached to any operating
greenhouse gas that licences obtained these may include but many not be limited to the
contributes to the following:
acceleration of climate • Ensure that any previously installed and new combustion
change systems are run as cleanly and efficiently as possible.
● Nitrogen oxides (NOx) – • Ensure that storage equipment has been designed and is
one of the main components maintained to minimise any toxic air emissions.
of ground level ozone that
can contribute to serious • Ensure facilities are equipped with reliable air emissions
respiratory problems in detection systems.
humans and wildlife • Ensure that plans are in place to minimise personnel
● Carbon monoxide (CO) – exposure to any toxic air emissions.
prevents humans and wildlife • Ensure that plans are in place to minimise community and
from breathing oxygen and wildlife exposure to toxic air emissions.
can lead to mortality
● Volatile organic
compounds (VOCs) – one of
the main contributors to
smog and can lead to serious
health problems in humans
and wildlife
Other, more toxic, substances such as
heavy metals and halide compounds
may also be released in smaller
quantities. Because thermal power
plants in Ghana tend to burn gas, they
are less likely to emit sulphur dioxide
and particulate matter than coal-fired
plants. Air emissions are not a
significant concern for hydropower
plants and for power transmission and
distribution.

Bank of Ghana | Power and Energy | 9

 Electrical Safety

Power transmission and distribution

lines inherently represent a large Risk Management
occupational hazard in terms of Client companies should implement the following risk management practices:
electrical safety as they are designed
to carry massive quantities of • In both thermal power plants and • Only trained and certified
electrical energy. Workers may be power transmission networks, workers should work on power
exposed to live power lines during ensure that the deactivation and transmission and distribution
construction and maintenance, which proper grounding of live power lines where they are dealing
can be a major health and safety equipment and distribution lines with energised equipment.
hazard. There are also electrical takes place according to
• Workers not dealing directly
hazards for workers at thermal power applicable legislation.
with power transmission lines
plants due to the presence of • Install hazard lights and high should adhere to local
energised electrical equipment (with voltage sensors inside electrical legislation relating to minimum
live electrical currents) and live power equipment enclosures. approach distances.
lines.
• Workers should have specialised
electrical safety training that
includes hazard awareness, safe
work procedures and first aid.
This means they should be able
to understand minimum approach
distances, make proper use of
safety equipment and procedures
as well as distinguish live parts
from other elements of the
electrical system.

Bank of Ghana | Power and Energy | 10

 Hazardous Materials

The power generation sector is

associated with a host of hazardous Risk Management
materials including insulating oils and Client companies should implement the following risk management practices:
gases. In particular these include:
Polychlorinated Biphenyls (PCB) and • Conduct hazard assessments in • Inspect any materials that have
Sulphur Hexafluoride (SF6). PCBs line with widely accepted the potential to contain asbestos
are especially toxic and are, in international standards and and take measures to prevent
particular, carcinogenic. SF6 has methodologies such as the airborne particles.
been shown to be a substantial Hazardous Operations Analysis
• Only allow trained personnel in
contributor to climate change. (HAZOP). Aspects of these
well-lit and ventilated areas to
Thermal power plants can typically assessments should include
undertake the mixing and transfer
host a broad range of additional hazard identification, handling
of pesticides.
hazardous materials that are stored at procedures and basic emergency
combustion facilities including: procedures. • Provide personnel with
treatment chemicals and large appropriate personal protective
• Ensure that there is adequate
quantities of coal or oil (in Ghana oil is equipment (PPE) and with
provision of secondary
more likely than coal as most thermal training for its use and
containment (e.g. double walled
power plants in Ghana burn oil). maintenance.
storage tanks) for the containing
Electrical transmission poles, when of hazardous materials should
made from wood, are typically treated they leak.
with preservatives to protect against • Replace existing transformers
rot and various bacteria and fungi. that still use PCBs and safely
Commonly used preservatives such dispose of them.
as creosote are being limited in some
countries due to their potentially toxic • Evaluate the use of alternative
nature. Pesticides are also widely materials such as concrete in the
used in and around transmission sites construction of transmission
and may pose a risk to biodiversity poles to avoid the requirement of
and human health if not managed or chemical treatment.
used correctly.
If they are working in older facilities,
workers may also be exposed to
asbestos. This is less likely to be the
case in Ghana as asbestos is typically
found in insulation used in colder
climates. However, given that
asbestos has also been used in the
past for its fire prevention qualities, it
may still pose a risk in facilities in the
power and energy sector in Ghana.

The Hazardous and Electronic Waste

Control and Management Act 2016
(Act 917) provides for the control of
management and disposal of
hazardous waste, electrical and
electronic waste and for related
purposes.

Bank of Ghana | Power and Energy | 11

 Occupational Health and Safety

Work in the power and energy

Risk Management
sector can present various types of
health and safety risks, in addition Client companies should implement the following risk management practices:
to the fire, explosion and
• Put in place a health and safety • Test the composition of air in
hazardous materials risks
management system that is confined spaces and take
referenced above.
independently certified to a necessary measures to ensure
In electrical power transmission, recognised standard (such as personnel are not exposed to
personnel work on high structures OHSAS 18001). harmful toxins.
during all phases of a project
• Provide personnel with • Ensure areas adjoining confined
(including both construction and
appropriate personal protective spaces provide room for
maintenance) and are at risk of
equipment (PPE) and/or emergency and rescue
serious personal injury if they fall.
respiratory protective equipment operations to take place should
Workers in thermal and hydro
(RPE) to include training on its the need arise.
power plants may also need to
use and maintenance.
work at height as part of • Implement recovery plans and
construction and maintenance of • Ensure that fall prevention and procedures should a worker have
the plants, which also presents protection measures are in place to enter a confined space.
similar risks of injury. whenever personnel are at risk of
• Ensure that adequate safety
falling more than two metres (into
There is also the potential for precautions exist including
water, or onto the ground or
serious injury from working in lifelines and safety watch workers
machinery).
confined spaces. During the outside the confined space.
operation of a thermal power plant • Install fall prevention
workers may be required to work in infrastructure including guard rails
confined spaces such as cooling and devices including lifelines
water containers. The dangers of and harnesses.
working in confined spaces include
overexposure to toxic gases and
dust, oxygen deficiency and
exposure to excessive heat. These
can lead to negative health impacts
for workers including (but not
limited to) respiratory conditions,
skin conditions, disorientation and
asphyxiation. The dangers of
confined spaces are compounded
by the difficulty inherent in
attempting rescue operations.

In accordance with the Labour Act

2003 (Act 651), it is obligatory for
employers to
ensure health, safety and welfare
of persons at workplace by
minimizing the causes of hazards
inherent in the working
environment.

Bank of Ghana | Power and Energy | 12

 Soil and Surface Water Contamination

Thermal power generation in Ghana

involves the storage and use of oil on Risk Management
site at large combustion plants. This Client companies should implement the following risk management
means that any fuel storage tank practices:
leaks or rainwater runoff has the
potential to contaminate the soil and • Ensure that wastewater • Ensure that any power plant
groundwater. Moreover, given the treatment systems are has an up to date and detailed
large amounts of water consumed by installed, operational and map of its different wastewater
thermal power plants in cooling, subject to regularly scheduled streams and their treatment.
there is a high likelihood of other maintenance and cleaning.
• Develop an Oil Spill Response
contaminants entering into water • Ensure that oil storage tanks Plan which includes training of
which may then be discharged into at thermal power plants are personnel and local
the nearby environment. maintained to local Ghanaian communities in spill prevention
Hydro power installations may cause standards or, where and response.
surface water contamination through appropriate, internationally
• Estimate and record the extent
spilled oils or chemicals. This can recognized standards (such
of oil spills by comparing the
occur during both construction and as ISO 16961:2015 and ISO
amount of oil spilled against
operation of the installation. 28300:2008).
the amount of oil collected
Furthermore, during operation, • Consider the availability of through clean-up efforts.
turbines may cause sediment to build environmental impairment
up in the lake above the plant before liability insurance that covers
being discharged into the river below. the liability and in some
Finally, pesticides used around cases the clean-up costs
transmission assets can leach into associated with pollution of
soil and surface water which may land. This will require the
cause negative impacts to client to prove (at its own
biodiversity or human health. cost) that the land is not
already contaminated before
cover can be provided.
• Ensure that the facility is
regularly subject to soil and
groundwater monitoring. This
should include comparison of
tested water and/or soil
samples against relevant
contaminated site
regulations. In the absence
of national standards,
recognised criteria for
evaluation should be used
such as the USEPA Region 3
Risk Based Concentrations.

Bank of Ghana | Power and Energy | 13

 Habitat Loss and Biodiversity

Cooling facilities at thermal power Risk Management

plants may discharge water with Client companies should implement the following risk management practices:
elevated temperature and chemical
contaminants. This may lead to • Thermal power plants should • During construction of
damage to aquatic ecosystems. seek to minimise and control transmission infrastructure, avoid
Moreover, as explained previously, environmental impacts critical habitats and migration
thermal power plants can release a associated with water discharge. corridors.
variety of air pollutants, such as • Hydropower plants should • Minimise the clearing of
Nitrogen oxides (Nox) and guarantee minimum water flow vegetation during construction of
Sulphuric oxides (Sox) that may and river levels to ensure marine infrastructure.
have a negative impact on plant life life is safeguarded.
and animal life. Dams and • Retrofit existing transmission
hydroelectric power stations can • Install technologies such as infrastructure by installing
affect the movement of fish as they barrier nets or mesh screens to obstructive perch deterrents.
affect water levels and flow. prevent harm to fish species.
Transmission and distribution
infrastructure pose a potentially
fatal risk to avian and bat life
through collision. Furthermore, the
construction of lines and associated
access roads may result in the
disruption of watercourses and
wetlands if vegetation must be cut
back to enable this construction. If
construction activities lead to
erosion, storm water runoff may
increase the turbidity of surface
watercourses.

Bank of Ghana | Power and Energy | 14

 Electromagnetic fields (EMF)

Electromagnetic fields are invisible

lines of force that are emitted by any Risk Management
electrical device. Both electric and Client companies should implement the following risk management practices:
magnetic fields decrease with
distance from the source but as • Identify potential exposure levels • Workers should be trained in the
voltage increases so does the strength in the workplace through the use identification of electromagnetic
of the electromagnetic field. This of personal monitors. This should field hazards and sources.
means that high voltage transmission include surveys of exposure
• Minimise public exposure by
lines can produce especially strong levels in new projects.
installing lines away from
electromagnetic fields. • Implement action plans to residential or highly frequented
The scientific community and the address exposure levels that areas.
public both hold some concern over exceed reference occupational
• Shield transmission lines from the
the potential risks associated with exposure levels developed by
public through the use of natural
human exposure to electromagnetic international organizations such
barriers, specific metal alloys,
fields. However, a recent review of as the International Commission
burying transmission lines or
existing scientific literature by the on Non-Ionizing Radiation.
increasing the height of
World Health Organization concluded • Put in place occupational transmission towers.
that there is currently no evidence of procedures such as work rotation
health consequences associated with to minimise exposure time, and
exposure to electromagnetic fields. increasing the distance between
Nevertheless, scientific knowledge is worker and source if possible or
always evolving and some limited the use of shielding materials if
concern for negative impacts not yet not.
discovered is perhaps warranted.
Moreover, the idea that transmission
lines pose a health risk has taken hold
in the public consciousness in a way
that creates potential reputational
risks to companies that do not work to
minimise public exposure to
transmission lines.
Electromagnetic fields can also pose
an occupational risk to workers in
thermal power plants. This is because
they work in proximity to power
generators and high voltage electrical
equipment.

Bank of Ghana | Power and Energy | 15

 Community Engagement

The Power and Energy sector can Risk Management

have both positive and negative
impacts on local communities. It can Client companies should implement the following risk management practices:
bring jobs to communities but it can • In the case that any community • Ensure implementation of a
also cause harm or inconvenience to members need to be resettled, grievance system in order to
these same communities. ensure that a resettlement action address community complaints.
The construction of power plants and plan (RAP) is put in place and
• Develop a system to warn local
transmission systems can result in adhered to. This should include
communities if they are at risk of
the displacement of communities or sufficient compensation to any
exposure to fire, explosion or
can lead to increases in noise, traffic members of the community who
toxic substances.
and health risks for communities. are resettled.
For instance, the recent Bui • Develop an evacuation plan for
• Attempt to minimise disruption to
Hydroelectric Dam involved the the local community in the event
neighbouring communities during
resettlement of 1,216 people. More that it becomes threatened by
operations.
specific information about the fire, explosion or exposure to
potential negative impacts on • Build public trust through public toxic substances.
communities is also detailed in many engagement with community
of the other sections of this stakeholders.
document.

Bank of Ghana | Power and Energy | 16

 Labour Rights

Ghana has ratified all 8 of the

International Labour Organisation Risk Management
(ILO) Fundamental Conventions. Client companies should implement the following risk management practices:
Moreover, labour regulation in • Ensure migrant workers, or their • As needed, provide appropriate
Ghana stems from the Labour Act labour supply agencies, comply worker accommodation which
2003. The Act consolidated all laws with the latest ILO requirements meets, at a minimum, the basic
relating to labour, employers, trade on working hours, pay, and needs of workers, and adheres to
unions and industrial relations, as overtime. local Ghanaian law or
well as establishing a National international good practice,
Labour Commission. • Ensure they or their labour supply
whichever is the higher standard.
agencies include all of the latest
The power and energy sector may ILO prohibitions on child labour in • Provide a code of conduct in a
attract short term workers who may contracting agreements (for language accessible by migrant
be hired directly or by sub- further details please refer to the workers and sub-contractors.
contractors. It is important to Child Labour section of this
ensure that all workers, and in document).
particular those who might be more
vulnerable to exploitation, are • Ensure compliance with the
treated fairly. Labour Act, 2003 including areas
regarding:
The Labour Act, 2003 regulates
employment and labour issues in • Protection of
Ghana. It covers a broad array of employment
topics such as employee security, • General conditions of
sick leave, domestic and employment
compensation, works and wages in
Ghana.

Bank of Ghana | Power and Energy | 17

 Visual Amenity

Transmission and distribution Risk Management

facilities can cause visual Client companies should implement the following risk management practices:
disturbance as above ground high
voltage pylons are highly visible. • During planning phases for power • Conduct sufficient public
The presence of these transmission generation and transmission consultation during the planning
lines and towers as well as infrastructure, ensure that phases of new transmission and
associated infrastructure and sufficient consideration is given to distributions lines if they will affect
equipment can cause visual the landscape and how changes residential areas.
disturbances of varying severity to it could impact the nearby
• For all new infrastructure
depending on the characteristics of environment and local
projects, ensure that all
the land and area. These are likely communities.
potentially affected parties are
to be undesirable to local residents, • Use existing transmission and given the opportunity to
particularly in urban areas and in distribution corridors rather than communicate their views to
areas of natural beauty. creating new ones. regulators and planners.
Power plants in themselves are large • Bury transmission lines • Revegetate disturbed areas with
industrial installations and as such underground where possible, native flora, helping to rehabilitate
may be visible over a wide area, especially in dense residential or unsightly landscapes.
especially if they feature tall commercial areas.
smokestacks or cooling towers. • Explore offshore wind sites as a
Renewable power generation can • Locate high voltage transmission first option if wind power grows in
also have a negative visual impact. lines in less populated areas so Ghana.
Dams, such as the Akosombo, can as to minimise visibility to local
have an impact on visual amenity as populations.
they are large constructions in the
middle of natural environments.
Moreover, they can create large
reservoirs like Lake Volta, which may
cover other areas of natural beauty
with water.
Although still nascent in Ghana, wind
turbines can potentially have
substantial impacts on visual
amenity. This would be of particularly
concern if they were installed near
residential or tourism sites.

Bank of Ghana | Power and Energy | 18

 Cultural Heritage

The IFC E&S Sustainability

Risk Management
Performance Standard 8 recognises
three types of cultural heritage1: Client companies should implement the following risk management practices:
• Tangible forms of cultural • Seek to minimise disruption to cultural heritage during planning,
heritage, such as tangible construction and operations of power generating plants and transmission
moveable or immovable objects, corridors.
property, sites, structures, or • In cases where power and energy sector construction and operation is
groups of structures, having deemed to put cultural heritage at risk, develop a management plan for the
archaeological (prehistoric), preservation of cultural heritage which includes:
paleontological, historical,
cultural, artistic, and religious • Information gathering on the cultural heritage in question
values • Assessing the value and significance of this cultural heritage
• Unique natural features or • Procedures for the protection of this cultural heritage
tangible objects that embody
cultural values, such as sacred
groves, rocks, lakes, and
waterfalls;
• Certain instances of intangible
forms of culture that are proposed
to be used for commercial
purposes, such as cultural
knowledge, innovations, and
practices of communities
embodying traditional lifestyles
Ghana has ratified seven UNESCO
conventions for the protection of its
cultural heritage and The Ghana
Museums and Monuments Board
(GMMB) is the legal custodian of
Ghana’s material cultural heritage.
The GMMB has the power to
designate national monuments,
thereby giving them statutory
protection2.
Construction of power plants and
transmission lines can potentially
pose a threat to cultural heritage.
This is particularly true in areas that
stand in the path of proposed
transmission corridors. Construction
in the power and energy sector
would be most likely to threaten
tangible and natural cultural heritage.

1https://www.ifc.org/wps/wcm/connect/c8f524004a73daeca09afdf998895a12/IFC_Performance_Standards.pdf?MOD=AJPERES
http://www.ghanamuseums.org/functions-activities.php
Bank of Ghana | Power and Energy | 19
Key E&S Opportunities
There are also a variety of opportunities for power and energy sector clients to deliver positive E&S impacts which can
benefit their financial bottom lines and engender good will.
In turn, these benefits to power and energy sector clients can also lead to benefits to banks in the form of:
• Increased revenue and profitability from working with clients that have strong, sustainable financial positions;
• Increased business opportunities for work with new clients that arise as a result of working in strong
sustainable, affluent communities; and
• Improved reputation from working with clients who effectively manage E&S issues.
In order to benefit from these opportunities, banks must first encourage their power and energy sector clients to pursue
the opportunities specific to their sector, which are detailed below.

Opportunities that may improve a client’s profitability include but are not necessarily limited to:

• Utilising more up-to-date tools and equipment for improved energy and resource efficiency, while also reducing
the likelihood of accidents.
• Developing new innovative product lines (such as smart technology, solar panels, etc.) that address energy
challenges. Banks have the opportunity to agree preferred credit lines with utility companies, who can then sell
these innovative products with finance plans directly to their customers.
• Implementing requisite health and safety and security procedures to reduce the likelihood of accidents and may
in some cases also lead to lower insurance premiums.
• Diversification of powers sources towards renewable and/or clean energy technologies may generate long-term
savings and decrease the carbon foot print of companies.
• Utilising drone technology to monitor and inspect power stations and power lines to prevent individuals being
exposed to occupational health and safety risks.

Opportunities that may strengthen communities and lead to improved reputation:

• Creating awareness of renewable energy options could influence community knowledge and preference.
• Providing highly reliable systems and services to the electricity infrastructure market may positively impact
brand.
• Providing solutions to energy challenges through collaborative actions with local communities may also
positively impact brand.
• Providing resources for local communities in line with the Sustainable Development Goals, such as access to
fresh water, health care and education. access to power in remote areas.

Bank of Ghana | Power and Energy | 20

Due Diligence Questions for Clients

• Do you have a board member dedicated to • Have you had any local community
addressing E&S issues? opposition?
• Does your company have any links between E&S • Do you devote resources to community
performance and executive compensation? investment?
• Do you have a code of conduct? • Do you have a system in place to respond
to community grievances?
• Have you had an environmental impact
assessment, if so how did you perform, if not then • Do you have a management plan for the
why not? preservation of cultural heritage?
• Do you have an environmental impairment liability • Have you incurred any environmentally or
insurance policy? socially related fines in the last 5 years?
• Do you operate in a stable ecosystem or one with • Do you have recognized certifications of
biodiversity risks? your operating system e.g. ISO 14001
(environmental management) and/or
• Do you track emissions? OHSAS 18001/ISO 45001 (health and
• Do you have any programmes for energy safety management)?
efficiency?
• Are you aligned with the Voluntary Principles for
Security and Human Rights?
• Are you compliance with Ghana’s Labour Act,
2003?
• Do you have non-zero accident targets for
workers?
• Do you offer health and safety training to workers?
• Do you have emergency response procedures in
place in the case of any accidents?
• Have you conducted hazard assessments in line
with international standards and methodologies
such as the Hazardous Operations Analysis
(HAZOP)?

Bank of Ghana | Power and Energy | 21

Key Performance Indicators

• Release of Sulphur oxides (SOx), Nitrogen oxides • Land area converted for operations
(NOx), and volatile organic compounds (VOCs) • Sustainability policies implemented at the
• Green House Gas emissions operational level (not just the corporate
level)
• Capital committed to pollution avoidance
• Cases of local community opposition
• Capital committed to mitigation of unforeseen
environmental costs • Expenditure on community investment
• Presence and performance on environmental • Human rights incidents
impact assessment(s) • Adherence to Voluntary Principles for
• Number of fires and explosions Security and Human Rights
• Number of incidents • Fines incurred in the last 5 years
• Number of injuries
• Number of fatalities
• Number of near misses
• Cases of employee opposition

Bank of Ghana | Power and Energy | 22

Sources for Additional Information

For further reading banks may find resources from the following
organisations useful:

• IFC Environmental, Health and Safety Industry Sector Guidelines

(http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_Exter
nal_Corporate_Site/Sustainability-At-IFC/Policies-Standards/EHS-
Guidelines/)
• IFC Performance Standards on Environmental and Social
Sustainability
(https://www.ifc.org/wps/wcm/connect/c8f524004a73daeca09afdf998
895a12/IFC_Performance_Standards.pdf?MOD=AJPERES)
• EBRD Sub-sectoral Environmental and Social Guidelines
(http://www.ebrd.com/who-we-are/our-values/environmental-
emanual-toolkit.html)
• Energy Commission Ghana (ECG) (http://www.energycom.gov.gh/)
• Ministry of Energy Ghana (MoE) (http://www.energymin.gov.gh/)
• Ghana Environmental Protection Agency (EPA)
(http://www.epa.gov.gh/epa/)
• European Energy Forum (EEF)
(http://www.europeanenergyforum.eu/)
• International Hydropower Association (IHA)
(https://www.hydropower.org/)
• International Renewable Energy Agency (IRENA)
(http://www.irena.org/)
• Ghana Grid Company (http://www.gridcogh.com/)
• Volta River Authority (http://www.vra.com/)
• Electricity Company of Ghana (http://www.ecgonline.info/)

Bank of Ghana | Power and Energy | 23