The Millennium Challenge Corporation (MCC), an independent U.S. foreign assistance agency that provided US$316 million in funding for the Ghana Power Compact II, still holds the view that there should be private sector participation in the Electricity Company of Ghana (ECG) to ensure efficiency in its operations.
Ghana signed the Power Compact II programme with the Millennium Challenge Corporation in 2014 to address several challenges ECG was facing.
The project included ECG’s financial and operational turnaround, regulatory strengthening and capacity building and access project.
The rests were power sector generation improvement Energy efficiency and demand-side management project.
One of the requirements was for the Ghana Government to invite private sector participants into ECG’s operations.
After a rigorous bidding process, Power Distribution Services (PDS) Limited, a consortium led by Filipino-based Meralco, was selected and subsequently handed over the assets of ECG on March 1, 2019.
Unfortunately, barely four months later, the Government of Ghana, in July 2019, suspended the concession agreement and subsequently terminated it on grounds of an invalid Demand Guarantee presented by PDS.
An investigation by the Government of Ghana revealed that there was no approval by Competent Signatories to the Demand Guarantees issued by Al-Koot in Qatar, therefore, the transaction lacked the required authorisation and approval of the company.
Moreso, Al-Koot had an underwriting policy and guidelines which required the approval of the Central Bank of Qatar, but no such approval was granted by the Central Bank of Qatar.
Speaking to a section of Ghanaian journalists last week, Deputy Chief Executive Officer of the MCC, Mahmoud Bah said his outfit respects the Government of Ghana’s decision to cancel the PDS deal with the Electricity Company of Ghana.
“We fully agree that private sector PSP in the ECG is required for us to have a sustainable solution. You cannot continue to do things the way you do. You have to inject some new perspective and new resources. The government can’t just do it all,” he argued.
According to Mr. Bah, the Government of Ghana acknowledges the importance of the private sector participant in the Electricity Company of Ghana and “as we speak, is addressing the issue of private sector participation.”
Emphasizing the importance of electricity, Mr Mahmoud Bah, said growth and electricity go hand in hand, stating that “the more you grow, the more electricity you need.
“No country has gone through development without electricity,” he pointed out.
Source: https://energynewsafrica.com
