The Millennium Development Authority (MiDA) has signed a contract with the International Finance Corporation (IFC) of the World Bank Group to advise on which private entity will take over the operations of the ECG for a yet to stated period of time.

As transaction adviser the IFC is expected to, among other things, help in producing the tender document for a concessionaire to be chosen on international competitive basis.

“We are expecting that the process, hopefully, will be completed by the end of the year," CEO of MiDA, Owura Kwaku Sarfo, said in Accra at the launch of preparations for the Millennium Challenge Account Compact II, which will run for five years.

The choosing of a concessionaire is among conditions precedent before the US government releases the first tranche ($149.6 million) of the US$498.2million second compact of the Millennium Challenge Account.

Other conditions MiDA has to meet before the funds are released include Procurement, Monitoring and Evaluation and Gender and Social Integration plans.

"I am happy to say that we have initiated arrangements to undertake these activities," Owura Kwaku Sarfo said.

Dedicated to the power sector, the money is targeted at six projects, including one that is supposed to improve the governance and management of the ECG by bringing in a private-sector operator for a possible 20 year period.

"Concession is like the Abusa system we are so familiar with in Ghana, where a landowner gives the land to somebody to farm it and at the end of harvesting they share the proceeds," Owura Kwaku Sarfo said.

Government has been emphatic on the fact that by the concession arrangement it is not embarking on an outright privatization of the ECG, as has been speculated in the public sphere.

"Let me quickly state that it does not mean we are selling ECG; the assets of ECG, all the properties of ECG will remain as they are," Deputy Power Minister, John Jinapor, said in May when he announced the concession arrangement.

To demonstrate its commitment to the power compact, the government of Ghana has also pledged to invest at least US$37.4 million of its own money as counterpart funding.

According to the Millennium Challenge Corporation, the compact could facilitate the injection of at least US$4.6 billion in private energy investment and activity from American firms over the coming years.

Already, America's General Electric (GE) has been working to roll out a 1,000 megawatt power project in the country, valued at over US$1 billion.

Government has said the country would need between US$10billion and US$15 billion in the next ten to fifteen years in order to bridge the widening gap between power demand and supply.

"These monies cannot come from government; they ought to come from Independent Power Producers," the MiDA CEO said.

"But the IPPs will not come until they are sure that we have a credible power off-taker so that they are sure that their investment will pay off. And so at the root of Ghana Compact II is attacking the governance structure of the ECG," he said.