Gov’t agrees to privatize ECG as condition to access Millennium Challenge funds
Government has undertaken to privatize the Electricity Company of Ghana (ECG) as part of a condition to access the second compact of the Millennium Challenge Account worth over $500 million.
It has also undertaken to adjust electricity tariffs every quarter as condition precedent for the disbursement of the fund.
These were contained in a Memorandum dated July 16 2014 and signed by Dr Ahmed Moustapha in which “The President has granted Executive Approval for the Second Compact of the Millennium Challenge Corporation (MCC) operated by the Millennium Development Authority (MiDA) of an amount of Five Hundred and Thirty-Five Million, Five Hundred and Sixty-Five Thousand United States Dollars (US$535,565,000.00) from the United States of America (USA) to be laid before Parliament.”
The memorandum, a copy of which was intercepted by Myjoyonline.com, was approved by Parliament on the final day of its sittings before it rose on July 18, 2014.
The second compact of the MCC has “the ECG Financial and Operational Turnaround Project” as one of six major projects to be undertaken with the fund.
As part of conditions for the funds to be released for the execution of the ECG Turnaround project, there must be;
“Evidence of the Government’s intent to proceed with an Acceptable ECG Private Sector Participation (PSP) Transaction, in a form and substance acceptable to MCC.”
It must also show “evidence of approval and implementation of quarterly tariff adjustments in accordance with formula that became effective prior to the initial CIF Disbursement,” the memorandum stated.
Under the current dispensation ECG is a limited liability company wholly owned by the government of Ghana and operating under the Ministry of Energy but with the approval of this memorandum first by the president and now by Parliament that status will change.
It is not clear yet in what form or substance the private sector intervention in the electricity sector would take.
But even before the policy would be rolled out, Head of Communications of the Convention Peoples Party (CPP), Nii Armah Akomfrah said his party would resist any form of privatisation of the sector.
He said the penchant by the New Patriotic Party (NPP) and the National Democratic Congress (NDC) led governments to sell off state assets is unacceptable.
On Joy FM’s Newsfile programme, the government critic said his party would mobilise the Trades Union Congress (TUC) and other pressure groups to kick against the policy approved by Parliament.
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