Remarks by Chargé d’Affaires Christopher J. Lamora
at the 2nd Commemoration of the Ghana Power Compact
Marriott Hotel, Airport City, Accra
Thursday, September 6, 2018; 6:00 – 7:45 p.m.
Honorable Minister of Energy John Peter Amewu,
Millennium Development Authority (MiDA) Board Chair, Professor Yaa Ntiamoah-Baidu,
MiDA CEO, Martin Eson-Benjamin
Distinguished Government of Ghana officials,
My colleague, Millennium Challenge Corporation Resident Country Director, in Ghana, Kenneth James Miller,
Members of the media,
Distinguished ladies and gentlemen,
All protocols observed.
Thank you for your welcome. It’s an honor to join you here tonight for this second commemoration of the Ghana Power Compact, following on the excellent meeting some of us had this morning with Vice President Mahamudu Bawumia at Jubilee House.
The Millennium Challenge Corporation (MCC) has a 14-year relationship with Ghana. We have signed two Compacts over that period at a combined value of over $1 billion.
Our first Compact, from 2007 through 2012, was focused on promoting agribusiness. We did so via investments in transportation infrastructure, connected 130,000 individuals to vital water systems, and trained over 67,000 farmers in advanced production techniques and supply chain management.
The U.S. Government, and especially MCC, are proud of this partnership with Ghana and our expectations are high for success on Compact 2. The people of Ghana can witness and appreciate the positive impact of our partnership. For example, just a few blocks from here tons of mango and pineapple coming in on the N-1 arrive at a pack-house near here and are shipped to Europe and the Middle East each week.
We faced challenges during Compact 1, but the level of complexity and intertwining of policy and institutional reform in Compact 2 is unique in the history of MCC.
The United States has been Ghana’s steady partner for power sector development over the past 60 years, from the Administration of President Eisenhower to today’s celebration of the MCC Compact. Throughout this period, Ghana has also risen as an example of democracy, peace, and development for this region, the African continent, and beyond. A nation where modern and traditional Africa thrive together. The future of Africa today, it’s been said. And yet to guarantee that future, ensuring reliable energy is necessary.
As we implement the largest U.S. government transaction under Power Africa, our focus is no longer on power generation, but rather on reliability, access, and affordability – pillars of investment and economic growth.
And while the bulk of our $498 million in grant funding will be spent on infrastructure — including sub-stations, line bifurcation, metering, and the like, — the real transformation under this partnership will occur under the 20-year concession, as recently ratified by Parliament, of the Electricity Company of Ghana (ECG) assets into the hands of private operator Power Distribution Services Ghana. This has been a challenging process with several layers of complexities. Yet together we have addressed them, and here we are today, marking a new chapter in our partnership.
We are keenly aware of the magnitude of this transformation. ECG, the 2nd largest power distribution company in sub-Saharan Africa, has a rich 50-year history with well over $1 billion in annual revenues and approaching four million customers. The concession arrangement ratified by Parliament is only the second such concession in the region in addition to Uganda, and by far more substantial.
MCC often likes to say that challenge is their middle name – and there is no underestimating that on this Compact. We commend the leadership of the Vice President, MiDA’s Board members and staff, the dedicated staff at ECG, the Public Utilities Regulatory Commission, the Energy Commission, the Ministries of Finance and Energy, and everyone whose efforts ensured this successful outcome.
This morning, while visiting Jubilee house, I had the distinct honor to present to His Excellency, Vice President Mahamudu Bawumia, the news of the Government of Ghana’s compliance with conditions laid out in the Compact related to the concession, new tariff plan, and payment of government arrears to ECG. The work of each of you has opened the door to an additional $190 million of grant funding from the United States of America to the Republic of Ghana. This complements the previous $308 million already accessible to Ghana, and a total of $498.2 million which MCC granted to Ghana.
This is extremely significant, and underscores our strong confidence in Ghana’s bright future. Yet while we celebrate this milestone, we also recognize the need to further strengthen our endeavors to reach the goals of this Compact.
First and foremost, we recognize that the concession is not yet complete. Full transfer must be completed between ECG and PDS. If Ghana is to reduce the current estimated distribution losses of $8 million per week, we need to tap into the private know-how and investment capital that PDS will bring.
Think about that figure – $8 million a week lost which could be invested elsewhere in Ghana’s development.
We also urge MiDA, ECG, NEDCo, and MCC to continue their serious cooperation. Combining MCC’s grant funding and the capital expenditure program of PDS, there will be an injection of investment in the local power distribution network like never before. This $1 billion jolt to the local economy over the next five years will have a profound impact on the local labor market and the Ghanaian economy in general.
My friends, we believe that promising times for Ghana are on the horizon. The United States is proud to be your partner in strengthening the foundations for increased operational efficiency, improved financial health, and creating an investment climate with stable power and reliable energy that Ghanaian customers need and deserve.
Congratulations on this milestone, and let’s continue to build a bright future for all Ghanaians.