US urges govt to finalise ECG’s deal

The United States of America’s Ambassador to Ghana, Mr Robert P. Jackson, has charged government to do everything possible to ensure it brings a financial closure to the selection of a concessionaire to manage some assets of the Electricity Company of Ghana (ECG) by September 2018. According to him, the US$ 190 million of compact funding from the US is contingent upon this.

At a joint committee steering meeting of the Partnership for Growth (PfG) programme, he said both the governments of  US and Ghana were on a very tight timeline and, therefore, urged the government to do all it could to ensure that all upcoming deadlines were met in order for the country to receive full benefits of the compact agreement.

The government of Ghana, under the Millennium Challenge Compact (MCC) is seeking to release a portion of ECG to a private company under a concession for some two decades.

Consequently, the government hosted the first ECG Concession Bidders Conference which brought together the five companies that were shortlisted last year as part of the procurement process for the long-term concession.

The government, over the next couple of months, is looking forward to the shortlisted companies returning to Ghana for a second bidders’ conference, the issuance of a final request for proposals, and receipt of the final bids by late October.

Benefits of the compact

Despite the country’s energy sector experiencing some stability in recent times, Mr Jackson said the most significant energy cooperation success story in the country was yet to come.

“I am very excited about the transformational opportunities the MCC can bring to the country’s power distribution sector. The compact is good for Ghana,” he said.

The compact is expected to bring US$ 498 million in investment from the US and the private sector operator that will be chosen by government, which will be working in partnership with a local Ghanaian business, is also expected to invest another US$ 100 million a year for the first five years of the concession.

“This is one billion dollars that will help return the ECG and other power companies to profitability and reliability,” the ambassador pointed out.

He said the opportunities that would be created by this significant investment would also create new jobs, lead to lower distribution costs, and improve power efficiency and availability.

“The compact agreement will not spell the end of rural electrification. On the contrary, the concession will want to increase the number of customers and the US government and other private companies will continue to develop solar power and other renewables,” he said.

Partnership for Growth programme

The Partnership for Growth (PfG) programme is a partnership between the US government and a select group of countries to accelerate and sustain broad-based economic growth through engagement with governments, the private sector, and civil society.

It seeks to replace the traditional donor-recipient model of international development assistance with a partnership based on mutually agreed upon actions and commitments.

Ghana is one of the four PfG countries in the world selected by the US for this programme and its framework works to deepen and strengthen the country’s bilateral engagement with the US government in promoting Ghana’s broad-based economic growth and inclusive development by addressing key constraints to private sector development and participation in the Ghanaian economy.

Constraints

The Ghana-US partnership has identified two constraints to economic growth which includes unreliable and inadequate supply of power and access to affordable credit.

In the quest to address these constraints, a five-year joint Country Action Plan (JCAP), has been developed consisting of two components- the JCAP Power component and JCAP Access to credit component.

The objective of the plan is to strengthen the power sector and increase access to credit, especially for the small and medium sectors.

The Minister of Finance, Mr Ken Ofori-Atta, at the 8th meeting of the Partnership for Growth Joint Steering Committee said Ghana was one of the four countries in the developing world that had entered into the partnership with the US.

He said since 2013, tremendous efforts had been collectively made in implementing the activities outlined under the action plan and appreciable level of success had, so far, been chalked out on both fronts.

Mr Ofori-Atta said the achievements had been made possible due to the shared commitment of members of the joint steering committee and the two technical working committees.

He expressed the hope that the World Bank being the new entrant to the partnership, already supporting the power and financial sectors in some capacity, could provide additional support to these sectors.

“We are very hopeful that your participation in the initiative will engender additional synergy which will go a long way in helping address the lingering challenges in the two sectors and also unlock the growth potential of the country’s economy,” he added.

He expressed the hope that the partnership in its final year and expected to end in March 2018 would make stakeholders continue to discharge their operational responsibilities and where required,  step up efforts to ensure that the desired goals were achieved. — GB