Six shortlisted entities that have shown interest in the concession for the Electricity of Ghana (ECG) private sector participation (PSP) were yesterday taken through the structure of the concession during a bidder’s conference in Accra.
The shortlisted companies are the Manila Electric Company from the Philippines; Ch Group/EDF and Veola Sa with Ghanaian address; the Engie Services S.A. from France, the BXC Company Ghana Limited from Ghana; the ENEL S.p.A. from Italy and the Tata Power Company Limited from India.
The concession is aimed at transforming the ECG under the Ghana Power Compact (GPC) between the government and the Millennium Challenge Corporation (MCC) of the United States of America (USA) through a $498.2 million grant.
The ECG PSP transaction is one of the five activities under the ECG financial and operational turnaround project founded through the Ghana Power Compact.
The compact, which would help to transform ECG in terms of technology and efficiency in power distribution, would also enable the company to meet the current and future energy needs of Ghanaian families and businesses.
Speaking at the opening session of the bidder’s conference, the Minister of Energy, Mr Boakye Kyerematen Agyarko said although past efforts at addressing the challenges confronting the country’s power sector had led to some successes, “a lot more remains to be done.”
He said years of inadequate investment, inefficiencies within the utility and large stock of outstanding receivables, particularly in the distribution sector had all conspired to make organisations in the sector what they were today.
The World Bank, Mr Agyarko said, in its 2015 Energy Outlook indicated that electricity was the second most important constraint to business activities in Ghana and that the country lost about 1.8 per cent of its GDP during the 2016 power crisis.
Additionally, he said the Institute of Social,Statistical and Economic Research (ISSER) in its 2014 study indicated that on the average, the country lost production worth about $2.1 million per day during the power crisis.
“Even more critical is the resulting loss of jobs the unreliable power has cost the people of our country and its effects on the livelihoods of our citizens,” he said, adding that “it is unacceptable to us when there is no electricity to power industries, when we cannot afford to buy power for the homes and when our communities cannot access power for health, educational purposes or security.”
He reiterated that the government was not privatising the ECG because the government would still own the assets through the ECG, while the company would be managed and operated by the concessionaire.
He said the bidding process was to seek the best qualified private sector partner with the financial capacity to partner the ECG.
In a remark, the Board Chair of the Millennium Development Authority (MiDA), Professor Yaa Ntiamoa-Baidu, expressed happiness that progress was being made towards the selection of a private sector partner for the ECG.
She said the bidders conference was a major step towards meeting the objectives of the Compact ll programme, saying “the interest in today’s activity is a clear demonstration of the recognition that reliable power supply is critical for the development of our dear country and indeed the recognition that private sector participation in ECG can facilitate the realisation of this important objective.”
For his part, the Chief Executive Officer of MiDA, Mr Owura K. Sarfo, said the ECG was one of the largest power distribution utilities in sub-Saharan Africa with more than three million registered customers and more than 6,000 gigawatts of electricity distributed and sold per annum.
Mr Sarfo said it was anticipated that the PSP transaction would result in the private investor bringing private financing to fund the key investments in the power sector to reduce losses and improve system performances.
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