Ghana is poised to enter discussions with the Government of the United States regarding the potential reinstatement of $190 million allocated for the electricity sector under the Millennium Challenge Corporation.
This announcement was made by President John Dramani Mahama during a visit from Mr. Ousmane Diagana, the Vice President of the World Bank for West and Central Africa, in the capital city of Accra.
Mr. Diagana’s visit to Accra was in connection with the inauguration of President Mahama at Independence Square on January 7.
President Mahama emphasized the necessity for his administration to reform the current energy sector systems to ensure debt reduction and improve efficiency beyond existing levels.
He recalled that while serving as Vice President under the late President Professor John Evans Atta Mills, he signed the MCC on behalf of the President, which aimed to enhance Ghana’s electricity production capacity, establishing it as a leading power producer in Africa and a central hub for electricity exports.
“Sadly, democracy has its benefits, but it can also present challenges. After we left office, a new government took charge and assumed control of the Millennium Challenge Compact. The final phase involved enhancing efficiency in distribution, billing, metering, and related aspects,” he noted.
“Moreover, PDS is no longer in the picture. However, we wish to reevaluate that situation because if the Electricity Company of Ghana remains unfixed, we will continue to face significant issues throughout our power value chain.
“Thus, we aim to revisit the idea of privatizing the last segment of electricity distribution to introduce private sector efficiency.”
“I engaged in discussions with the Americans and the Millennium Challenge Corporation, requesting the reinstatement of the $190 million initially allocated for this purpose. They have indicated that the possibility remains open,” the President shared.
“Therefore, it is crucial to continue that dialogue. Alternatively, if we cannot access the $190 million, we could explore whether the World Bank can assist us in addressing that component, particularly in minimizing losses related to independent power producers (IPPs).”
He mentioned that in the meantime, efforts would be made to enhance transparency within the system and reinstitute the cash waterfall mechanism to stabilize the situation until broader reforms can be implemented in that sector.
Mr. Ousmane Diagana, the World Bank Vice President for West and Central Africa, reaffirmed the Bank’s dedication to supporting Ghana’s socioeconomic development initiatives.
