The Government of Ghana has renegotiated the Millennium Challenge Corporation (MCC) Power Compact II to ensure a better deal for Ghana and also safeguard the welfare of staff of the Electricity Company of Ghana (ECG).
Ghana and the Millennium Challenge Corporation (MCC), an independent United States government agency, signed the Power Compact Deal on the sidelines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014. The Compact is being implemented by Ghana through the Millennium Development Authority (MiDA).
As a result, Ghana is to get from the MCC US$498,200,000 to fix and improve its power supply, thereby spurring economic activity through job creation which will in turn help reduce poverty.
US$350 million of the grant will be invested in Ghana’s state-owned power distributor ECG to make it operationally and financially efficient.
The Power Compact is meant for six main projects. They include: ECG Financial and Operational Turnaround Project; NEDCo Financial and Operational Turnaround Project; Regulatory Strengthening and Capacity Building Project and Access Project; Power Generation Sector Improvement Project; and Energy Efficiency and Demand Side Management Project.
There have been fears that the involvement of the MCC in Ghana’s power sector will lead to massive layoffs at ECG and also dilute Ghana’s stake in the state-owned power distributor.
Speaking to journalists on the sidelines of the International Monetary Fund (IMF) and World Bank Spring meeting currently ongoing in Washington DC, Ghana’s Vice President Dr Mahamudu Bawumia said the Compact is being renegotiated to safeguard Ghana’s interest as well as ensure job security for ECG staff.
“We talked to the Millennium Challenge Corporation when we got here, we are trying to renegotiate the concession agreed. As you know the NDC government signed on to a compact as far as concession of ECG is concerned so we have been talking to the Millennium Challenge Corporation (MCC) on that matter and we are renegotiating the agreement in the sense to make sure that the concession agreement has majority Ghanaian ownership,” he explained.
“It has to be majority Ghanaian owned. Secondly we have to have an assurance that there will be no lay-offs at ECG as a result of the concession and also it will be managed by Ghanaians. So those are the elements that we have insisted on and also we have gotten an understanding on these elements,” he said.