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November 4, 2025
This the second article in a series about financing programs designed to help families access energy-efficient, non-polluting air conditioning systems and refrigerators in African countries. The first article discussed energy-efficient lighting and cooling programs in Senegal, including the Programme to Promote Efficient Lighting Lamps and the ECOWAS ECOFRIDGE Initiative.
Similarly, the United Nations Environment Programme’s United for Efficiency initiative, the government of Ghana, and the Basel Agency for Sustainable Energy launched the Ghana ECOFRIDGES Green On-wage financing program in 2019. It also receives funding from the Clean Cooling Collaborative.
The Ghana ECOFRIDGES Green On-wage (GO) financing mechanism is a loan program designed to facilitate the adoption of efficient and sustainable refrigeration and cooling systems among families in Ghana, a country in West Africa. The program offers flexible and affordable financing to salaried employees, primarily those in the public sector, to purchase energy-efficient air conditioners and refrigerators. Financing the purchase of cooling equipment helps households reduce upfront costs, lower energy consumption, and reduce greenhouse gas emissions. ECOFRIDGES GO is expanding and becoming the primary financing mechanism in the AGORA project, a collaborative effort by Ghana and Nigeria to cut greenhouse gas emissions from obsolete refrigeration and air conditioning equipment.1
Ghana
Ghana boasts a population of about 32 million people and borders the Ivory Coast to the west and Togo to the east. The country is a member of the Economic Community of West African States (ECOWAS), a regional group of 15 countries that aims to promote economic growth.
Investing in energy-efficient cooling systems and refrigerators helps Ghana meet its international and national climate commitments, as outlined in its nationally determined contribution (NDC) to the Paris Agreement. The energy-efficient lighting program also contributes to several international sustainability goals, including increasing access to affordable and sustainable energy (Sustainable Development Goal 7).
Rapid urbanization in Ghana and Africa more broadly, coupled with the escalating effects of climate change and rising temperatures, has led to a surge in the use of air conditioners, resulting in higher energy consumption and carbon emissions. According to the International Energy Agency, electricity consumption from air conditioners across Africa is projected to skyrocket by 1,000% by 2040, underscoring the urgent need for sustainable solutions.
Because Ghana’s energy production is predominantly based on fossil fuels (62%), as energy consumption increases, so do greenhouse gas emissions. Ghana’s electricity usage per capita and energy-related carbon emissions have risen significantly in the last two decades.
Ghana, like many African countries, is experiencing a surge in the importation of cheap, illegally sourced second-hand fridges and cooling appliances from Europe that do not follow legal import pathways. As a result, the market is flooded with appliances that have very low upfront costs but rack up high monthly energy bills due to their inefficient designs. Outdated refrigerators consume up to three times as much energy as efficient models available today. About two million fridges and air conditioners are illegally imported into Ghana every year to meet demand, creating unfair competition for legal vendors.2 These low-efficiency refrigerators and air conditioners (ACs) consume significant amounts of energy and thus contribute to climate change, as they are powered by fossil-fuel-based energy sources.
Global Cooling Pledge
Seventy-one countries, including the United States, are part of the Global Cooling Pledge, a commitment initiated at the 2023 U.N. climate summit (COP28) to address greenhouse gas emissions from refrigerators and air conditioners. The Global Cooling Pledge calls for a 68% reduction in emissions by 2050, increased availability of and access to sustainable cooling solutions by 2030, and increased energy efficiency of air conditioners.
Low-efficiency fridges and air conditioners are not just a financial burden but also a significant environmental threat. They contain refrigerants such as chlorofluorocarbons (CFCs) and hydrofluorocarbons (HFCs), harmful gases with a high global warming potential (GWP) that also damage the ozone layer (GWP measures how much heat a greenhouse gas traps in the atmosphere). This underscores the critical importance of regulating the import and domestic production of domestic appliances and air conditioners to ensure they meet the country’s energy efficiency standards. However, more efficient systems are more expensive upfront than their conventional counterparts, and most families in Ghana lack access to financing, as banks are reluctant to offer consumer loans due to high default rates.3
Replacing inefficient, old cooling systems and fridges with high-efficiency models that have significantly lower energy use than traditional systems is an effective way to reduce energy bills, helping families save money. Installing new low-GWP cooling systems and refrigerators also helps lower greenhouse gas emissions, reducing impacts on the environment and on people’s health while fulfilling international agreements.
One such agreement is the Kigali Amendment to the Montreal Protocol, which Ghana has ratified. In 1989, the Montreal Protocol banned CFCs, potent man-made refrigerants with the capacity to deplete the ozone layer. In 2016, the Kigali Amendment was approved to phase out the use of HFCs, refrigerants that are 9,000 times more damaging to the environment than carbon dioxide. Both CFCs and HFCs can be found in older air conditioners and refrigerators.
Replacing millions of outdated and inefficient cooling systems is very costly. Incentives and subsidies can help families make the change, and so can financing programs like ECOFRIDGES GO. Financing the installation of energy-efficient systems with low-GWP refrigerants is a creative way for countries like Ghana to meet their Kigali Amendment commitments.
“Incentivizing energy efficiency and efficient appliances for households to use less power and use energy more wisely is good for everyone—for the environment and the electric utilities,” said Daniel Magallon, managing director at the Basel Agency for Sustainable Energy (BASE) Foundation. “Scaling up energy efficiency in Africa requires climate financing mechanisms, such as on-bill financing and wage-on-bill [financing], which need to be adopted by more financing institutions, businesses, corporations, and national governments. ECOFRIDGE GO is a type of public-private partnership between public institutions—such as national governments and state utilities—and private financing institutions and corporations.”
Since its inception in 2019, the ECOFRIDGES GO program has financed approximately 33.77 million Ghanaian cedis’ ($3.3 million) worth of appliances, resulting in the purchase of more than 2,055 new air conditioners and 3,136 new refrigerators. Installing more efficient equipment has resulted in 34,603 tonnes of CO2 equivalent direct and indirect greenhouse gas emission reductions, as well as 41,783 megawatt-hours of total energy savings.4
The ECOFRIDGES GO program is funded by the Clean Cooling Collaborative, and also receives in-kind contributions from the government of Ghana, the United Nations Environment Programme’s United for Efficiency (UNEP U4E) initiative and BASE. The Clean Cooling Collaborative, originally launched as the Kigali Cooling Efficiency Program by climate foundations in 2014, supports on-bill financing initiatives to replace outdated cooling systems with efficient ones that do not use harmful refrigerants, with implementation assistance from UNEP.
Unlike the Senegalese on-bill financing program covered in a previous article, the Ghana ECOFRIDGES GO program is on-wage rather than on-bill. That means that participants repay the loans for their upgraded appliances through a deduction from their paychecks, not from their utility bills. Loans to salaried employees are offered at 0% interest and have a repayment period of 24 to 36 months. The financing is structured so that the upgrade repayment is equal to or less than the energy savings generated by the new, more efficient equipment, which results in immediate cost savings.
Ghana Star Label, a program similar to ENERGY STAR in the United States, helps determine which equipment is eligible for ECOFRIDGES GO financing. Room ACs, for instance, must have an efficiency rating of three stars or higher and use R32 refrigerants to qualify for the program. Most used ACs have a GWP of 2,088, while R-32 systems usually have a much lower GWP of about 675. Refrigerators must rate five stars or higher to qualify. In effect, ECOFRIDGES GO is changing the type of fridges and cooling equipment consumers choose to purchase. The program markets energy efficiency to middle-class Ghanaians through targeted television commercials and social media.
Under the program, partner banks provide capital to technology vendors, who then offer discounted air conditioners and fridges to program participants. The capital allows providers to import certified models of fridges and ACs that meet the program’s requirements. Participants apply for and receive a loan to purchase the refrigerating and cooling equipment at a discounted rate, paying it off over time through their monthly paychecks. Employers act as guarantors for the loans, thereby reducing the need for stringent credit assessments and collateral requirements.
Participating vendors deliver the new appliances to the customers, and collect the old ones. Old and outdated fridges and air conditioners are recycled by the vendors through e-waste management services developed by the program. Improper handling of e-waste materials is a significant challenge in Ghana, resulting in high levels of pollution that disproportionately affects low-income and disadvantaged communities. Imported, cheap, and inefficient cooling and fridge equipment is often discarded at informal e-waste sites near Accra, the country's capital. Informal e-waste recycling practices include burning plastic and other materials found on the exterior of fridges and air conditioners to extract the valuable copper and wiring contained within. Thus, one of the goals of the ECOFRIDGES GO program is to encourage more responsible e-waste recycling methods.
ECOFRIDGES GO has inspired the west African country of Nigeria, which has partnered with Ghana on the Abating Greenhouse Gas Emissions from Obsolete Refrigeration and Air Conditioning Equipment (AGORA) program, alongside the United Nations Development Programme and UNEP.
The AGORA program aims to facilitate the transition to more sustainable refrigeration and air conditioning equipment by replacing outdated and inefficient cooling systems with low-GWP technologies instead. That will reduce energy consumption and greenhouse gas emissions.
The AGORA program will use a financing model like the one used by ECOFRIDGES GO, with the French Global Environment Facility providing 2.4 million euros ($2.77 million) in seed capital. The AGORA program will run from 2024 through 2027, financing low-GWP and domestically manufactured R290 air conditioners. Replacing older cooling systems with more efficient ones that do not harm the climate helps Ghana and Nigeria meet their nationally determined contributions cost-effectively.
Author: Miguel Yañez-Barnuevo
[1] In conversation with Hubert Nsoh Zan, assistant manager of the Ghana Energy Commission
[2] In conversation with Basel Agency for Sustainable Energy Managing Director Daniel Magallon and Project Manager for Sustainable Finance Thomas Fuhr.
[3] In conversation with Daniel Magallon and Thomas Fuhr.
[4] Email conversation with Hubert Nsoh Zan.
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