MiDA urges local companies to invest in ECG

Mr Owura Kwaku Sarfo, Chief Executive Officer of the Millennium Development Authority (MiDA), has urged interested local companies to partner with international companies to bid and invest in Ghana’s energy sector.

“We would urge all interested parties, particularly, Ghanaian indigenous companies, to take up the challenge and quickly submit their letters to express their interest in this venture,” he said.

Speaking at a media conference, on Wednesday in Accra, Engineer (Ing) Sarfo said the transformation of Electricity Company of Ghana (ECG), which falls under the Ghana Power Compact (GPC) between the Government and the Millennium Challenge Corporation of the USA, was to help transform ECG in terms of technology and efficiency in power distribution to become a stronger company.

That Compact would also enable ECG to meet the current and future energy needs of Ghanaian families and businesses.

The Ghana Compact Two programme, which is also called Power Compact, being implemented by MiDA, is the largest U.S. Government transaction under the Power Africa initiative, introduced by US President Barack Obama.

Ing Sarfo explained to the media that the Power Compact would be a major catalyst to the developmental efforts of Ghana, as it sought to address the root cause of Dumsor, the current energy crisis in Ghana.

“We, at MiDA, are also excited that through the interventions to be initiated under the Compact Two Programme, we can play a critical role in banishing dumsor from the power landscape in Ghana in the medium-term, so that it does not rear its ugly head again in the future,” he said.

The CEO of MiDA said any company or partner, which would finally win the concession bid under a private sector participation in ECG, would have to satisfy various conditions such as, being sensitive to local customs and conditions, and ensuring the equitable treatment of ECG staff, who were just about 6,000.

Other conditions would are leveraging private capital to address operational and commercial competencies necessary for specific challenges of ECG’s operation and applying corporate-wide approaches with respect to operation, management and governance of ECG.

Ing Sarfo said under the whole Compact, six projects that had been identified were ECG’s financial and operational turnaround project; regulatory and operational turnaround project; access project; power generation sector improvement project; and energy efficiency and demand side management project.

He gave the assurance that much progress had been made since the compact was signed on August 2014, saying, tremendous efforts had been made to fulfil the conditions that needed to be satisfied before the Programme Funds could be released, which was called the Conditions Precedent.

He announced that by the end of the year, the tender document would be launched whilst in May to June 2016, offers would be accepted from interested companies and the concession would be given out around May 2017.

“Under the Concession, Ghana would still own the assets of ECG and set the rules for the concession deal,” he explained.” The concession is expected to last between 20 and 30 years but we are still to agree on the specific period,” Ing Sarfo explained.

Dr Kofi Asamoa Baah, a Technical Advisor at the Ministry of Finance, said Ghana really needed such private partnership deal to address her energy crisis as government could not address the dumsor through the national budget allocation, which left ECG with only seven per cent for investment.

The Millennium Challenge Corporation would invest up to $498.2 million to support the transformation of Ghana’s power sector and stimulate private investment.

The five-year Ghana Power Compact seeks to create a financially viable power sector that would meet the current and future needs of households and businesses and ultimately help fight poverty across the country.

The compact would play a critical role in Power Africa, the U.S. Government’s initiative to double access to power on the African continent.

The government is expected to invest at least $ 37.4 million of its own money, and the Compact is expected to catalyze at least $ 4.6 billion in private energy investment and activity from American firms in the coming years.