Business News of Tuesday, 24 January 2017
The Minister nominee for Energy, Boakye Agyarko, has described the Millennium Power Compact II as a concession and not an outright sale of the Electricity Company of Ghana (ECG) to the Millennium Development Authority(MiDA).
Reacting to questions on whether the compact was a sale or not at the Appointment Committee of parliament, Mr. Agyarko insisted that the compact will only lease the assets and liability of ECG to the concessionaire to operate for a period of time.
“The concession is not a sale. If you read the compact very carefully it is explicitly clear that the assets remain with government but there is a lease on the assets so the concessionaire comes in O& M to use the assets of government. So it is not a sale. The assets never leave the book of records of government so it’s not a sale.
It is not a sale. It is a grant of concession for a period,” he said . In 2016, workers of the ECG embarked on series of demonstrations against the compact, describing it as a subtle sale of ECG which may lead to job losses after the concessionaire operates it for five years.
“Let the concessionaire come in and take all the debt, assets and liability and move on and see if they will outperform ECG. Our position is , yes there is a compact let us take on board all the issue that have been raised both by ECG workers, Civil Society originations and others and let us see if we can have a common ground to reduce the tension so the project can move on,” he stressed.
Allaying fears of the compact been cancelled by the Trump administration, Mr. Agyarko explained that the compact was approved by the US congress hence binding on any US government. He was optimistic government will complete the processes outlined in the compact which will enable Ghana to access a grant of over US$400 million to be invested in Ghana’s power sector.
The Trades Union Congress petitioned the then Chief of Staff under the Mahama led administration, Julius Debrah, to halt a Bidders conference that was supposed to take place in late last year.
The conference was subsequently halted.
The Compact II
Under the Power Compact, six projects will be implemented to address the the root causes of the unavailability and unreliability of power in Ghana The project include ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, and Access Project.
The rest are Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project,. The Government of Ghana signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington on August 5, 2014.
Ghana to get over 498m dollars
Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014.
The Ghana Power Compact would provide Ghana with a grant sum of four hundred and ninety eight million, two hundred thousand United States Dollars (US$498,200,000) to improve the performance of Ghana’s power sector, unlock the country’s economic potential, create jobs, and reduce poverty.
About US$350 million of the grant is being invested in ECG to make the country’s power distributor operationally and financially more efficient.
The Compact is being implemented by the Government of Ghana through the Millennium Development Authority (MiDA).