Seth Terkper and Dana Hyde initialing for their countries
A two-year erratic supply of power that has brought businesses to their knees in Ghana is expected to lessen with the signing of an agreement between the US and Ghana on Tuesday in Washington D.C..
The two countries agreed for $498,200,000 grant to be released by the US Government under the second compact of the Millennium Challenge Account to improve power distribution in the country.
Finance Minister Seth Tekper and Chief Executive Officer (CEO) of the Millennium Challenge Corporation, Dana Hyde signed the agreement while President John Mahama and US Secretary of State, John Kerry looked on.
President Mahama noted that the new Compact with the MCC demonstrated the growing cooperation between Ghana and the USA, adding that it would benefit millions of Ghanaians and contribute hugely to the success of his ‘Energy For All’ objective.’
The second compact, which is expected to last for five years, will witness management of the Electricity Company of Ghana (ECG) being offered to a private company in a bid to inject efficiency in the power distributor’s operations.
The management outsourcing is billed to allay fears that the government-owned power company was up for outright sale.
Under the agreement, Ghana is likely to contribute 15 per cent of its own funds to the project pushing the figure to $535,565,000.
The second compact, according to the MCC, is the largest U.S. Government transaction to date under Power Africa and will serve as an anchor for increased American engagement in Ghana.
‘MCC’s Ghana Power Compact takes a system-wide approach to transforming Ghana’s energy sector. The compact invests in projects focused on distribution to make the country’s power utility financially viable and capable of attracting private investment while it also funds initiatives supporting greater energy-efficiency and cleaner renewable energy. These investments will provide Ghanaian homes, schools and hospitals with the access to the reliable electricity they need to thrive,’ said Dana J. Hyde, MCC’s CEO.
MCC will make an initial investment of up to $308.2 million, including funding to put the Electricity Company of Ghana, the country’s main distribution company, on a sustainable path, help the utility meet current electricity needs and upgrade infrastructure to reduce outage and improve service.
A second tranche of up to $190 million in funds will be made available if Ghana accomplishes a set of reform targets set forth in the compact.
The Millennium Challenge Corporation (MCC), a bilateral United States foreign aid agency signed the first compact with Ghana in August 2006 and gave the country US$547 million.
It saw the execution of significant infrastructural projects, including the current iconic National Highway (N1) in Accra.
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