Modeled scenarios
To showcase the importance of the indirect and induced impacts of the project construction and finance characteristics, we first present the economy-wide changes at an aggregate level (GDP, employment and household welfare) and sectoral level coming from the commissioning of the Bui Dam without the hydropower generation uncertainty stemming from hydrological flow variability in the Volta Basin. The results are structured across three construction and finance scenarios:
- 'electricity-only' - this case determines the economy-wide impacts of an increase in hydropower production without any consideration of the investment and finance componets. This serves as a reference scenario having been used in previous hydropower project assessments.
- 'loans' - a scenario where, in addition to higher hydropower production, the project costs are considered during the construction phase of the dam and are covered using the two government-backed loans (12-years and 20-years) as described above. This scenario does not include the cocoa exports included in the final loan agreement for the Bui Dam.
- 'resource-secured loans' - similar scenario as 'loans' but also including the cocoa export agreement over the 2013 - 2032 time period. The delta between the 'loans' and the 'resource-secured loans' scenarios provide insights into the economy-wide impacts of negotiated conditions for securing loans at preferential interest rates.
The additional hydropower production capacity introduced in these three scenarios is applied in the 2013-2067 timeframe and was determined using the water balance model (see above):
- 24.9% increases of the total hydropower capacity as the long-run multi-annual mean values of Bui hydropower production relative to the 'without project' baseline
- 4.4% increases in long-run production due to flow regulation for the Akosombo Dam(see previous results section).