The Minister for Energy, Boakye Agyarko has explained that the 51 percent stake demanded by government in the Electricity Company of Ghana ( ECG) Private Sector Participation(PSP) will be controlled by Ghanaian private investors.
According to him, government’s demand of the 51 percent will depend on the Bidders Conference, which is expected to assemble all the six concessionaires in Accra by May 23, as well as the ability of the Ghanaian investors to provide over $50 million each year for a period of 5 years.
Mr. Agyarko’s comments follow a recent announcement by President Akufo-Addo that Ghana has renegotiated the deal to control 51 percent of the Power Compact II with the Millennium Challenge Corporation(MCC).
Under the Compact, the MCC through the Millennium Development Authority (MiDA) is expected to invest 498 million dollars into ECG while the concessionaires invest about 500 million dollars.
Speaking to Citi Business News at the inauguration of the ECG PSP Stakeholder Committee, Mr. Agyarko emphasized that government will not settle for anything less than 51 percent of Ghanaian private participation of the ECG.
“All we are saying is that we want a minimum of 51percent Ghanaian ownership. The final number depends on what the bidders’ conference ends up with and the final number also depends on the subscription. When we say a minimum of 51 percent, it means that the Ghanaian or the Ghanaian entity have to come up with the 51 percent of the money,” he stressed.
Mr. Agyarko maintained that government’s quest is to leave ECG in the hands of Ghanaian private investors since government is constraint in putting more money into the company.
“We are looking at $500 million dollars spread over 5 years, that is $100 million dollars every year. It means that a Ghanaian entity must be able to come up with a minimum 50 million dollars every year for five years, if we find a Ghanaian entity that will come up with more money, then the number will change. All we are saying is that we want a minimum of 51 percent for Ghanaian,” he reiterated.
Reacting to a question whether government will aid the private sector, Mr. Agyarko stated the project is a purely private sector compact.
The Compact II
Under the Power Compact, six projects will be implemented to address the the root causes of the unavailability and unreliability of power in Ghana
The project include ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, and Access Project.
The rest are Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project,.
The Government of Ghana signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington on August 5, 2014.
Ghana to get over 498m dollars
Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014.
The Ghana Power Compact would provide Ghana with a grant sum of four hundred and ninety eight million, two hundred thousand United States Dollars (US$498,200,000) to improve the performance of Ghana’s power sector, unlock the country’s economic potential, create jobs, and reduce poverty.
About US$350 million of the grant is being invested in ECG to make the country’s power distributor operationally and financially more efficient.
The Compact is being implemented by the Government of Ghana through the Millennium Development Authority (MiDA).