A huge chunk of the funds to be received from the Millennium Challenge Corporation (MCC) for the Ghana Power Compact, will go to utility provider, the Electricity Company of Ghana (ECG).
MCC is to make an initial investment of up to $308.2 million, including funding to put the Electricity Company of Ghana, the country’s main distribution company, on a sustainable path.
That cash is also to help the utility provider to meet current electricity needs and upgrade infrastructure to reduce outages and improve service.
The Ghana Power Compact invests up to $498.2 million to support the transformation of Ghana’s electricity sector and stimulate private investment.
Ghana will invest $37.4 million of its own funds in the initiative making the compact a total investment of up to $535.6 million.
The five-year compact is designed to create a self-sustaining energy sector in Ghana by reforming laws and regulations needed to transform the country’s power sector.
The Ghana Power Compact is expected to catalyze more than $4 billion in private energy investment and activity from American and global energy firms in the coming years.
The compact will support improved management of Ghana’s entire power system, providing a more robust framework for private investment as well as a more competitive process for the procurement of power from independent producers.
It will address challenges in distribution, generation and access to energy in Ghana.
Meanwhile a second tranche of up to $190 million in funds will be made available if Ghana accomplishes a set of reform targets set forth in the compact.
By: Vivian Kai Mensah/citifmonline/Ghana/Washington