First tranche of MCA grant ready by mid-2015

Ghana is hopeful of accessing the first tranche of funds from the Millennium Challenge Corporation’s (MCC) latest grant by mid-2015.

The agreement between Ghana and the United States to access the grant, worth US$498million under the second compact of the Millennium Challenge Account, was signed on August 5 this year. The funds will be used for improvement of power distribution in the country. 

Ms. Deidra Fair James, the Country Team Leaderof the Millennium Challenge Account at the United States Embassy in Ghana, told journalists in Accra that the immediate next-step for the country to access the funds is reconstitution of the Millennium Development Authority board.

“A board needs to be put in place, which should be a public-private board. This will constitute representation from key ministries and the sectors as well as representatives from civil society organisations and the private sector. That needs to happen right away,” Ms. James said.

“Once the board is in place, it will be working to hire staff.  This will be a competitive process and needs to get started right away in order to move forward with the implementation.

“It takes usually about nine to 12 months to constitute a board, start hiring, collect the baseline data, and ensure all the studies are completed so we can start. There is money available to facilitate project preparations.”

Under the second compact, an initial investment of up to US$149.6million will be provided to put the country’s main distribution company, the Electricity Company of Ghana (ECG), on a path to sustainability.

It will also help the ECG meet existing and future demand for electricity by improving oversight and management, and upgrading infrastructure to reduce inefficiencies and improve service. 

The grant will be targetted at enhancing the distribution system, effecting institutional changes, and creating a Power Park to boost energy consumption.

In November 2013, government submitted a concept-paper proposal to the board of directors of the MCC to support power generation and distribution in the country.

Ghana’s demand for power is growing at around 10 percent per annum, spurred by robust economic growth and rising consumption. 

Presently, Ghana has 2,800 megawatts of installed electricity capacity -- with government promising to deliver 5,000 megawatts by the end of 2016.

In August 2006 Ghana signed the first compact for an amount of US$547million, making it the third-biggest beneficiary of this initiative by the United States government after Tanzania (US$698million) and Morocco (US$698million).

The first compact came into force on February 16, 2007. The agricultural sector was the main focus, but transportation and rural development were also covered. In January 2011, Ghana was selected with two other countries for the second compact.