Ghana is one of Africa’s oldest democracies, and the nation’s economic growth has been truly impressive over the past decade. However, the lack of affordable and reliable power is preventing the country from reaching greater heights and lifting more of its citizens out of poverty.
MCC’s $498 million investment in the power sector came with some risk. The state-owned power company, Electric Company of Ghana (ECG), has been plagued by technical and commercial inefficiencies as well as mismanagement that have resulted in ECG losing around $8 million per week, and a complex reform agenda was required to bring life to Ghana’s ailing power sector.
With the recent Ghanaian cabinet approval and parliamentary ratification of a landmark transaction with a respected international consortium, the Government of Ghana has passed the reforms necessary to improve the financial and operational health of the sector, triggering the release of the remaining $190 million in grant funding. It is a testament to the commitment of the Ghanaian government to improve its power sector in an effort to bring better critical services to its people and meet the increasing demand from businesses and other consumers for reliable energy. And this is also an important demonstration of how MCC’s model works to incentivize meaningful change, even in politically challenging environments.
The MCC Ghana Power Compact has already catalyzed nearly $3 billion in new private investment and is expected to benefit an estimated 9.7 million Ghanaians over the next 20 years.
Original source: MCC
Published on 6 September 2018
