President John Dramani Mahama has announced that his administration is initiating negotiations with the Millennium Challenge Corporation (MCC) to release a grant of US$190 million for the country’s energy distribution improvements.
The energy sector is still the “Achilles heel” of Ghana’s financial and economic stability, according to President Mahama, and measures must be made to improve it in order to support the expansion of the economy.
During a meeting in Accra on Wednesday with Ousmane Diagana, the World Bank’s Regional Vice President for Western and Central Africa, President Mahama stated that his government would shortly discuss the issue with the MCC.
“I spoke to the Americans during my last visit to the US. We met with the MCC and we asked if it was possible for them to reinstate the US$190 million that they had devoted to it and they said the door is not closed. So we need to pursue that discussion,” he stated.
Following the collapse of a concession agreement between the Electricity Company of Ghana (ECG) and the Power Distribution Services in 2019, Ghana was deprived of the sum.
In order for Ghana to have a strong energy sector and establish itself as the center of the West Africa subregion, the president stated that fixing the ECG was unavoidable.
“We want to take a look at that again because if we don’t fix the ECG, we will continue to have a major problem with our whole value chain.
“So going ahead with privatising the last point of distribution of electricity to bring in private sector efficiency is something we want to take up again,” he remarked.
Notwithstanding the MCC award, President Mahana stated that his administration will rely on the World Bank to provide the necessary knowledge to carry out that exercise “so that we can reduce the losses where it has to do with the IPPs.”
To stabilize the situation until we can implement all the reforms in that sector, the President stated “restore some transparency in the system, restore the cash waterfall mechanism so that we stabilise the situation until we are able to carry out all the reforms in that sector”.
Mr. Diagana stated that the World Bank would be open to providing Ghana with the necessary support to tackle the issues in the energy industry.
He said the energy sector in Ghana has been a constant source of problems for the Bank over the years and needs to be fixed.
By making investments in new power infrastructure, promoting energy-efficiency measures, and fostering inclusive economic possibilities in the power sector, the Ghana Power Compact with the MCC, a US government agency, aims to revolutionize the nation’s energy sector.
President Mahama signed the US$316 million grant agreement in 2014 to address the electricity sector’s constraints.
Source: newsthemegh.com