Energy Efficiency Financing and Cooling Program in Ghana Inspires Neighbors – Environmental and Energy Study Institute (EESI)

Report on the Ghana ECOFRIDGES Green On-wage (GO) Financing Program and its Contribution to Sustainable Development Goals

1.0 Introduction

This report analyzes the Ghana ECOFRIDGES Green On-wage (GO) financing program, a mechanism designed to facilitate the adoption of energy-efficient refrigeration and air conditioning systems. The program represents a strategic initiative to address pressing environmental and economic challenges in Ghana, directly contributing to the achievement of multiple United Nations Sustainable Development Goals (SDGs), particularly those concerning energy, climate, and sustainable consumption.

2.0 Context: The Imperative for Sustainable Cooling in West Africa

Rapid urbanization and rising temperatures attributed to climate change have precipitated a significant increase in demand for cooling appliances across Africa. This trend presents a multifaceted challenge directly impacting several SDGs.

• Energy Demand and Climate Impact: Ghana’s energy production is 62% reliant on fossil fuels. The projected 1,000% increase in electricity consumption from air conditioners in Africa by 2040 threatens to escalate greenhouse gas emissions, undermining progress towards SDG 13 (Climate Action).
• Market Inefficiencies: The influx of approximately two million illegally imported, second-hand, and inefficient appliances annually floods the Ghanaian market. These units consume up to three times more energy than modern equivalents, placing a financial burden on households and straining the national grid, which conflicts with the objectives of SDG 7 (Affordable and Clean Energy).
• Environmental Hazards: Obsolete appliances often contain high Global Warming Potential (GWP) refrigerants like chlorofluorocarbons (CFCs) and hydrofluorocarbons (HFCs). Their improper disposal contributes to pollution and e-waste, posing risks to public health and ecosystems, thereby challenging SDG 3 (Good Health and Well-being) and SDG 12 (Responsible Consumption and Production).

3.0 The ECOFRIDGES GO Program: A Financial Model for Sustainability

Launched in 2019, the ECOFRIDGES GO program is a public-private partnership involving the Government of Ghana, the United Nations Environment Programme’s United for Efficiency (UNEP U4E) initiative, and the Basel Agency for Sustainable Energy (BASE). It provides an innovative solution to overcome the high upfront cost barrier of efficient appliances.

3.1 Program Mechanics

1. Financing Structure: The program offers 0% interest loans to salaried employees, primarily in the public sector, for the purchase of certified energy-efficient appliances.
2. Repayment Method: It operates on an “on-wage” basis, where loan repayments are deducted directly from participants’ monthly paychecks over a 24 to 36-month period. Employers act as guarantors, reducing financial risk.
3. Appliance Eligibility: To qualify, appliances must meet standards set by the Ghana Star Label program. Air conditioners must have a rating of three stars or higher and use low-GWP refrigerants (e.g., R-32), while refrigerators require a five-star rating.
4. Circular Economy Component: Participating vendors are responsible for delivering new appliances, collecting the old units, and ensuring their proper recycling through designated e-waste management services.

4.0 Direct Contributions to Sustainable Development Goals

The ECOFRIDGES GO program is strategically aligned with the 2030 Agenda for Sustainable Development, making significant contributions across several goals.

4.1 SDG 7: Affordable and Clean Energy

The initiative directly promotes Target 7.3 (double the global rate of improvement in energy efficiency). By replacing inefficient appliances, the program lowers household energy consumption, leading to reduced electricity bills and making energy more affordable for families.

4.2 SDG 13: Climate Action

The program is a key tool for Ghana to meet its Nationally Determined Contribution (NDC) under the Paris Agreement and its commitments to the Kigali Amendment. It achieves this by:

• Reducing energy demand from the fossil-fuel-dependent grid.
• Phasing out high-GWP HFC refrigerants in favor of climate-friendly alternatives.

4.3 SDG 12: Responsible Consumption and Production

ECOFRIDGES GO fosters sustainable consumption patterns by incentivizing the purchase of certified, energy-efficient products. The integrated e-waste management system promotes the environmentally sound disposal of hazardous materials, advancing Target 12.5 (substantially reduce waste generation through prevention, reduction, recycling, and reuse).

4.4 SDG 17: Partnerships for the Goals

The program exemplifies a successful multi-stakeholder partnership (Target 17.17) by uniting national government bodies, UN agencies, international organizations (Clean Cooling Collaborative, BASE), financial institutions, and private sector vendors to achieve common sustainability objectives.

5.0 Quantifiable Impacts and Outcomes

Since its inception, the program has yielded significant and measurable results:

• Financial Mobilization: Approximately 33.77 million Ghanaian cedis ($3.3 million) in financing has been facilitated.
• Appliance Deployment: Over 2,055 new air conditioners and 3,136 new refrigerators have been purchased.
• Greenhouse Gas Reduction: The program has resulted in 34,603 tonnes of CO2 equivalent in direct and indirect emission reductions.
• Energy Savings: A total of 41,783 megawatt-hours of energy has been saved.

6.0 Scalability and Replication: The AGORA Program

The success of the ECOFRIDGES GO model has inspired the Abating Greenhouse Gas Emissions from Obsolete Refrigeration and Air Conditioning Equipment (AGORA) program, a collaborative effort between Ghana and Nigeria. Supported by the French Global Environment Facility, AGORA will adapt the on-wage financing mechanism to promote domestically manufactured, low-GWP air conditioners, demonstrating the model’s potential for broader regional impact in advancing the SDGs.

Analysis of Sustainable Development Goals (SDGs) in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy

  The article directly mentions SDG 7. The core focus of the ECOFRIDGES GO program is to promote energy-efficient appliances like refrigerators and air conditioners. By helping families switch to models that consume less electricity, the program contributes to making energy more affordable (through lower bills) and cleaner (by reducing the overall demand on a fossil-fuel-heavy grid).

• SDG 12: Responsible Consumption and Production

  This goal is addressed through the program’s efforts to change consumption patterns. It encourages the purchase of sustainable products (high-efficiency, low-GWP appliances) and tackles the issue of e-waste by ensuring old, inefficient appliances are collected and recycled responsibly, moving away from informal and polluting disposal methods.

• SDG 13: Climate Action

  The article explicitly links the program to climate commitments like the Paris Agreement and the Kigali Amendment. By financing the replacement of old cooling systems that use high-GWP refrigerants (CFCs, HFCs) and consume large amounts of fossil-fuel-based electricity, the initiative directly works to reduce greenhouse gas emissions and mitigate climate change.

• SDG 11: Sustainable Cities and Communities

  The article notes that “Rapid urbanization in Ghana… has led to a surge in the use of air conditioners.” The program addresses the environmental impact of this urban trend by promoting sustainable cooling solutions. It also tackles the urban problem of e-waste, which disproportionately affects communities near cities like Accra.

• SDG 17: Partnerships for the Goals

  The entire initiative is a model of multi-stakeholder partnership. The article details collaborations between the government of Ghana, international organizations (UNEP, UNDP), financial agencies (Basel Agency for Sustainable Energy), philanthropic funders (Clean Cooling Collaborative), private banks, and technology vendors. The AGORA program further exemplifies this with its partnership between Ghana and Nigeria.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 7.3: By 2030, double the global rate of improvement in energy efficiency.

  The article’s central theme is improving energy efficiency. The ECOFRIDGES GO program directly contributes to this target by facilitating the replacement of old appliances that “consume up to three times as much energy as efficient models” with new, highly efficient ones (e.g., 3-star ACs and 5-star refrigerators).

• Target 12.4: By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle… and significantly reduce their release to air, water and soil.

  The program addresses this by phasing out appliances containing harmful refrigerants like CFCs and HFCs, as mandated by the Montreal Protocol and its Kigali Amendment. Furthermore, the article states that “Old and outdated fridges and air conditioners are recycled by the vendors through e-waste management services developed by the program,” which is a direct action towards environmentally sound waste management.

• Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse.

  The initiative promotes the reduction of e-waste by creating a formal channel for recycling. The article mentions that participating vendors “collect the old ones” for proper disposal, thus diverting them from informal dumpsites and contributing to waste reduction and recycling efforts.

• Target 13.2: Integrate climate change measures into national policies, strategies and planning.

  The program is presented as a key strategy for Ghana to meet its “international and national climate commitments, as outlined in its nationally determined contribution (NDC) to the Paris Agreement.” This demonstrates the integration of climate action (promoting energy efficiency and phasing out HFCs) into national planning through a public-private financing mechanism.

• Target 17.17: Encourage and promote effective public, public-private and civil society partnerships.

  The ECOFRIDGES GO program is described as a “public-private partnership between public institutions—such as national governments and state utilities—and private financing institutions and corporations.” The collaboration involves the UN, government bodies, NGOs, and private companies, perfectly illustrating this target.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for Target 7.3 (Energy Efficiency):

  The article provides a direct quantitative measure of progress: “41,783 megawatt-hours of total energy savings” have been achieved since the program’s inception. The requirement for appliances to meet specific efficiency ratings, such as the “Ghana Star Label” standard of “three stars or higher” for ACs and “five stars or higher” for refrigerators, also serves as a qualitative indicator of improved energy efficiency.

• Indicator for Target 13.2 (Climate Action):

  A specific metric for GHG reduction is provided: “34,603 tonnes of CO2 equivalent direct and indirect greenhouse gas emission reductions.” Additionally, the shift from high-GWP refrigerants to low-GWP alternatives like R-32 (with a GWP of about 675 compared to 2,088 for older models) is a clear indicator of progress in mitigating climate impact.

• Indicator for Target 12.5 (Waste Reduction):

  The number of old appliances collected and properly recycled can be used as an indicator. The article states that “2,055 new air conditioners and 3,136 new refrigerators” were purchased, implying that a similar number of old units were collected for e-waste management, which can be tracked to measure progress.

• Indicator for Target 17.17 (Partnerships):

  The amount of financial resources mobilized through the partnership is a key indicator. The article mentions that the program has “financed approximately 33.77 million Ghanaian cedis’ ($3.3 million) worth of appliances.” For the subsequent AGORA program, “2.4 million euros ($2.77 million) in seed capital” is cited as another indicator of successful financial partnership.

4. Summary Table of SDGs, Targets, and Indicators

Source: eesi.org