ECG privatisation: Our approach was not to impose privatisation on Ghana, says MCC

The Millennium Challenge Corporation (MCC) says its approach in Ghana was not to impose the privatisation of the Electricity Company of Ghana (ECG) on the government.

Speaking at a press conference on climate change issues and development projects, Mahmoud Bah, acting CEO of the Millennium Challenge Corporation (MCC) said, “So first on Ghana, we are very proud of the work that we’re doing in Ghana in our compact there. The compact aims to create a self-sustaining power sector that will meet the current and future needs of households and businesses.”

Bah said, “As you all know, in many markets in Africa, without electricity we limit the productivity especially for women who tend to also be the ones taking care of the family. So we take that very seriously and we continue to work with the Government of Ghana to ensure that our investment will ultimately lead to an efficient electricity company, to a reliable electricity that will expand opportunities for the private sector.

“That is a good signal for investors – the stability of the utility and the reforms that we are pushing in the efficiency of the regulator and so on.”

He said, “When it comes to the issue of privatisation, I just want to make some clarifications. We had a component in the compact that was about self-sustaining efficiency of the Electricity Company of Ghana, (ECG).

“That transaction didn’t pan out, but our approach was not to impose a privatization; it was to propose whatever method the Government of Ghana deemed to be the most appropriate to make ECG the most efficient and effective electricity or utility company.”

He added, “We now have other components in the compact that we are pushing toward the end of this compact and finishing the implementation there, and that is based on strengthening the infrastructure and the management of the southern distribution network, the area in and around Accra. We have also expanded access by implementing activities, whether it’s the electrification of markets, the electrification of streetlights.”

Ba added, “These access components are extremely important, especially when we come to women’s participation in the economy.”

In 2019, the government terminated the concession agreement with the Power Distribution Services (PDS) Ltd over the take-over of the assets of the Electricity Company of Ghana (ECG) for distribution of electricity in the southern sector of the country.

The move was necessitated by a forensic audit conducted by the Millennium Challenge Corporation (MCC) and the government of Ghana’s investigations into the issuance of demand guarantees for the concession transaction, which revealed that the payment security for the transaction was invalid.

About MCC

The Millennium Challenge Corporation (MCC) is a development assistance agency working with a select number of countries in low- and low-middle-income countries to reduce poverty through economic growth.

MCC’s core investments, known as compacts, are country-led investments designed in close collaboration with our country partners. These grants are large, multi-year, and predictable. These are not loans and they do not add to the country’s debt burden.

The compacts tend to pair large investments in infrastructure in sectors like water, energy, agriculture, with institutional and policy reforms that ensure those investments have a significant and sustainable impact.

MCC has successfully delivered 38 compacts in 29 countries, with two-thirds of those in Africa.

The MCC programmmes have delivered hundreds of projects that are improving the lives of an estimated 188 million people.

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