The Chief Executive of the Millennium Challenge Corporation (MCC), Dana Hyde is insisting that the support for Electricity Company of Ghana (ECG) under the second compact program will not result in its privatization.

Unionised staff of ECG over the past months have kicked against the concessional arraignment for ECG, saying it is an attempt by the government to hand over the entity to a foreign firm, adding what was happening was a “disguised” privatization of ECG, which they will not support.

Speaking with some selected journalists in Accra, as part of her working visit to Ghana, Dana J Hyde, said during their negotiations with Ghanaian Authorities, there was any proposal or discussion on the table to privatise ECG.

 

Still on the concerns of Privatization of ECG

Dana Hyde added that the decision to focus on the power sector was based on Ghana’s own request , that is the areas that the $498 million will be directed to  develop the sector .

The Chief Executive of MCC, also added, she is convinced by the assurances coming from the Millennium Development Authority, that there will not be any immediate job losses.

She maintained that the corporation’s focus is to  “look at how the investments will bring real benefits to the people, how much income may rise, jobs that will be created by this compact”, “ What we are trying to do is to make ECG stronger”     

When asked by JOYBUSINESS on what MCC sees at privatization, especially when the workers of ECG are insisting that what is happing is privatisation.
 

Mrs Hyde said, “I think the privatization is ownership, and the ownership of this utility, but in this case asset here will belong to Ghana and will continue to belong to Ghana”.

The Chief Executive of the Millennium Development Authority (MiDA), Ing. Owura Kwaku Sarfo, recently told the media that workers of ECG will not lose their jobs under the concession agreement to bring on board private participation in the management of the company.

Additionally, he said, the agreement would not precipitate increases in electricity tariffs. He said apart from the fact that there would be no point in retrenching staff because 15 per cent would go on retirement in the next five years, the key elements of ECG’s private sector participation (PSP) transactions guaranteed jobs for five years.

 

Possible third compact for Ghana

On a Possible third compact for Ghana? Mrs Hyde although it might be early days yet to the future of the compact, they are actively engaging the necessary players, whether it might be prudent to look at regional support and rather than a third compact based on bilateral arraignment with a country.

Drawing down the $498 million compact

On September 7 this year, Ghana reached or entered into force under the compact program. 

This means that the treaty signed on August 5 between the country and US government, has become effective and Ghana can have access to the program funds of almost $500 million.

About six firms have been shortlisted to managed the whole concession arraignment for ECG. They include Manila Electricity company from the Philippines, Tata Power company from India/UK, Engie Energie Service from France, Enel S.P.A  from Italy,  BXC Ghana Limited from Ghana - China,  Manila Electric from Philippines, Tata Power Company - India, and CH group, EDF, SA, a joint bid made up of a Ghanaian firm and France.

The Chief Executive of MiDA was recently quoted in the local media that whoever gets the nod, will be required to invest a minimum of $100 million over the next five year and further investment over the next five years.

According to the Authority, there should be a new concessionaire by the third quarter of 2017 there should be a concessionaire managing ECG operations.

The projected project fund is said to be about $535.6 million and it is divided into three - a programme funding of $469 million, a compact implementation funding of $29 million from the United States grant of $498 million and a government of Ghana contribution of US$37.4 million.  

The Program consists of six Projects:

(i) the ECG Financial and Operational Turnaround Project;

(ii) the NEDCo Financial and Operational Turnaround Project;

(iii) the Regulatory Strengthening and Capacity Building Project;

(iv) the Access Project; (v) the Power Generation Sector Improvement Project; and

(vi) the Energy Efficiency and Demand Side Management Project.

Ghana in 2014 signed an agreement with the US government for the release of almost $500 million to help transform the energy sector.