Recently, Ghana signed a Power Compact with the Millennium Challenge Corporation (MCC), making it the current largest American Government‐funded transaction of President Obama’s Power Africa initiative.The Ghana Power Compact facilitates the investment of up to $498.2 million for the transformation of Ghana’s power sector while also stimulating private investments.
Eventually, the deal is expected to raise more than $4 billion from American and global energy firms. Key among the objectives of this compact is the reformation of laws and regulations required for the revolution of the sector, the provision of a robust framework for private investments and the establishment of a more competitive process for the acquisition of power from independent producers.
“MCC’s Ghana Power Compact takes a system‐wide approach to transforming Ghana’s energy sector,” Dana Hyde, MCC’s CEO said regarding the deal. “The compact invests in projects focused on distribution to make the country’s power utility financially viable and capable of attracting private investment while it also funds initiatives supporting greater energy efficiency and cleaner renewable energy.”
The MCC will provide initial funding of about $308.2 million in order to set the country’s main distribution company on the trajectory to sustainability and then provide an additional $190 million in funding if the country is able to meet a set of reform‐oriented targets listed as part of the compact. Ghana is expected to invest up to $37.4 million of its own funds in the initiative which will also address challenges in the generation, transmission and distribution of energy within the country.
President John Mahama believes the new deal will enable the realization of the “Energy for All” initiative. “This new compact with the MCC demonstrates the growing cooperation between Ghana and the USA. It will benefit millions of our people and contribute immensely to the achievement of my ‘Energy for All’ objective.
The Power Africa Initiative was launched by President Barack Obama last year with the aim of doubling access to electric power on the African continent.