Ghana is set to receive the second tranche of $190 million from the Millennium Challenge Compact after meeting requirements to access the funds.
The country signed an agreement with the United States government to release some $498.2 million to help transform Ghana’s power sector. The first tranche of $308.2 million was released in 2016.
The five-year compact, the largest U.S. Government transaction under Power Africa, is expected to catalyze billions of dollars in private energy investment.
It also seeks to create a financially viable power sector that will meet the current and future needs of households and businesses—and ultimately help fight poverty across the country.
At the heart of the compact is a strong commitment from the Government of Ghana to implement reforms needed to transform its power sector and put it on a path to profitability and sustainability, ultimately creating a climate that will attract private investment.
These reforms appear to have been achieved by the government, with the most critical being the privatization of the Electricity Company of Ghana (ECG).
The Millennium Challenge Corporation has on Thursday submitted a letter acknowledging Ghana’s achievement of the milestone to the president.
The letter submitted by a delegation led by Board Chair of the Millennium Development Authority (MiDA) Prof Yaa Ntiamoa-Baidu and Charge d’Affairs and Ag. U.S. Ambassador to Ghana, Christopher Lamora was received by the Vice President Dr Mahamudu Bawumia on behalf of the president who has yet to arrive in Ghana from China.
Prof Ntiamoa-Baidu commended Ghana for the significant milestone in the implementation of the Compact programme.
“With these funds, MiDA together with its implementing entities will be able to carry out the planned investment and reform activities aimed at strengthening our country’s power distribution sector,” she added.
Acting Chief Executive Officer of the Millennium Challenge Corporation, Broke Bierman said although meeting the milestone is a testament to the commitment of government, much work remains.
He said with only three years remaining in the compact, “we must continue to work together until the concession is complete and the path is paved to inject private-sector investment and expertise to transform the viability of the Ghanaian power sector.”
The Vice President acknowledged the notification and thanked the U.S. Government and the MCC for their partnership through the Ghana Power Compact, which in his view was a manifestation of the strong cooperation that Ghana has with the US.
“Today is a great day and we are entitled to celebrate our achievement,” he said. “However we have a significant number of project activities to be carried out in order to meet all milestones. I, therefore, urge all stakeholders to continue to collaborate and maintain the alacrity they have demonstrated so far.”
He reiterated Government’s commitment to ensuring that the Compact delivers its goal to reduce poverty through economic growth, by transforming the power distribution sector.
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