The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, on Thursday announced supporting an investment to supply 60,000 cubic metres of potable water per day to Teshie Nungua near Accra.

A plant will be built on a 25-year build-own-operate-transfer basis and is expected to benefit approximately 500,000 people, an official statement made available to the Ghana News Agency in Accra stated.

Izumi Kobayashi, MIGAs Executive Vice President, said increased water supply is urgently needed in the project area and many residents lack access to safe drinking water.

“We are very pleased to be supporting this investment that will supply water to Accra’s residents and provide technical know-how in seawater treatment to build capacity in the country,” he stated.

MIGAs investment guarantees of $179.2 million are covering an equity investment and shareholder loan by Abengoa Group, an equity investment and shareholder loan by Daye Water Investment (Ghana), BV of the Netherlands; and a non-shareholder loan and interest-rate swap by Standard Bank of South Africa, Ltd.

The coverage is against the risks of transfer restriction, expropriation, breach of contract, and war and civil disturbance.

The project is expected to help bring Ghana a step closer toward its Millennium Development Goal target for water.

The country is only one of four in sub-Saharan Africa on track to meet the goal, but significant investment is required over the next 10 years to help Ghana meet the rising demand for water.

“We are pleased to be investing in a project that will increase the water supply and help reduce the prevalence of water and sanitation-related diseases, including cholera, that are currently affecting the area,” Mr. Takatsune Hirayama of Daye Water Investment (Ghana) stated.

It will also eliminate the need to purchase water from water trucks, which is expensive but has a doubtful quality.