More Ghanaians are expected to be connected to the national electricity grid as the first tranche of the Millennium Challenge Corporation (MCC) cash is expected to hit the government?s account by December this year, the Vice President at the Department of Compact Operations at the MCC, Kamran M. Khan has disclosed.

Mr. Kamran M. Khan (left) and Ms. Deidra Fair James, the Country Team Leader of the Millennium Challenge Account at the United States Embassy in Ghana
Mr. Kamran M. Khan (left) and Ms. Deidra Fair James, the Country Team Leader of the Millennium Challenge Account at the United States Embassy in Ghana

The agreement between Ghana and the United States to access $498 million grant under the second compact of the Millennium Challenge Account, was signed on August 5, 2014. The funds will be used for improvement of power distribution in the country.

?Every dollar from MCC must create economic growth. We therefore expect that the first tranche of the fund when released would be used to expand the distribution networks of electricity so that more people would have access to power,? Mr. Khan stated in a round-table discussion organized by the US Embassy in Accra last Friday but failed to disclose the amount involved for the first tranche.

The Vice President of MCC, who is in the country to have meetings with President John Mahama and some key ministers said, the government had so far met certain recommendations spelt out in the agreement and was hopeful that by December 2015, the remaining shall be met for the release of the fund.

?I am happy with the progress made so far especially with regards to the establishment of Millennium Development Authority

?MCC has five years to implement the project with Ghana. If the recommendations are not met by December, we shall hold on the money,? Mr. Khan warned.

While the Government of Ghana (GoG) has made some progress in reforming the energy sector in the past two decades, the gradual process of change can no longer keep up with the rapid urbanization, growing demand for power and the GoG?s aggressive rural electrifications programme. There is a substantial and growing gap between demand and available supply, plus an appropriate reserve margin.

The five year $498.2 million Ghana Power Compact will seek to reduce poverty and open the Ghanaian energy market to private investment by supporting the transformation of Ghana?s power sector. The compact also seeks to create financially available power sector that will meet the current and future needs of households and businesses, as well as create credible off-takers for fuel supply and generated electricity.

A private sector stakeholders group was consulted throughout the Compact development. This stakeholders group consisted of gas and power generation and distribution companies, including independent power producers, international banks and financial institutions, equipment suppliers, utility managers, and international oil companies.

By Felix Dela Klutse

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