President John Dramani Mahama has given the indication of his government opening talks with the Millennium Challenge Corporation (MCC) for the release of US$190 million grant towards reforms in the distribution of electricity in the country.
According to President Mahama, the energy sector remains the “Achilles heel” of Ghana’s financial and economic stability and steps must be taken to put it in a better shape to support the growth of the economy.
In a meeting with Ousmane Diagana, the Regional Vice President for Western and Central Africa at the World Bank, in Accra on Wednesday, President Mahama said his government would soon engage the MCC on the matter.
“I spoke to the Americans during my last visit to the US. We met with the MCC and we asked if it was possible for them to reinstate the US$190 million that they had devoted to it and they said the door is not closed. So we need to pursue that discussion,” he said.
Ghana lost out on the amount after the cancellation of a concession agreement between the Electricity Company of Ghana (ECG) and the Power Distribution Services in 2019.
Fixing the ECG, the President said was inevitable if Ghana was to have a robust energy sector and become the hub in the West Africa subregion.
“We want to take a look at that again because if we don’t fix the ECG, we will continue to have a major problem with our whole value chain.
“So going ahead with privatising the last point of distribution of electricity to bring in private sector efficiency is something we want to take up again,” he emphasized.
The MCC grant notwithstanding, President Mahana said his government would fall on the World Bank for the needed expertise to undertake that exercise “so that we can reduce the losses where it has to do with the IPPs”.
In the meantime, however, the President said his immediate focus is to “restore some transparency in the system, restore the cash waterfall mechanism so that we stabilise the situation until we are able to carry out all the reforms in that sector”.
For his part, Mr Diagana said the World Bank would be willing to give Ghana the needed assistance in addressing the challenges in the energy sector.
He described Ghana’s energy sector as one that had always given the Bank headache over the years which needs fixing.
The Ghana Power Compact with the MCC, an agency of the US government, is designed to transform the country’s energy sector by investing in new power infrastructure, advancing energy-efficiency practices, and creating inclusive economic opportunities in the power sector.
The US$316 million grant pact was signed by President Mahama in 2014 to resolve the bottlenecks in the power sector.
BY JULIUS YAO PETETSI
