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Business News of Friday, 7 August 2015

Source: Myjoyonline.com

Ghana likely to access Millennium Challenge Compact II

The country is now likely to start receiving funds from the Millennium Challenge Compact from January 2016.

This is the new timeline officials from the Millennium Development Authority are looking at, if they are able to meet all the conditions for disbursement. Some of the conditions include improving upon regulations of the power sector and restructuring the operations of the Electricity Company of Ghana (ECG).

The US government earlier this year said they were looking at Ghana making its first drawings December but the country failed to meet the necessary conditions for releasing the funds.

Vice President at the Millennium Challenge Corporation, Kamran Khan told JOY BUSINESS it is necessary that these conditions are instituted to ensure the effective use of the funds.

He pointed out that although many of the things had been done, if by December government is unable to fulfill its part of the deal, “we will wait, we will do it when they are done right because that’s what people of Ghana want”.

But speaking to JOYBUSINESS, Director of Communications and Outreach, Millennium Development Authority(Ghana) Pamela Djamson-Tettey says her out fit is working hard to meet the deadline.

The country last year signed an agreement with the US government to release some 498 million dollars to help transform Ghana’s power sector. The MCC funds will be disbursed over a five-year period.

MCC's $498.2 million compact with Ghana will fight poverty by transforming the country's energy sector.

The five-year compact, the largest U.S. Government transaction under Power Africa, is expected to catalyze billions of dollars in private energy investment.

The Compact seeks to create a financially viable power sector that will meet the current and future needs of households and businesses—and ultimately help fight poverty across the country.

At the heart of the compact is a strong commitment from the Government of Ghana to implement reforms needed to transform its power sector and put it on a path to profitability and sustainability, ultimately creating a climate that will attract private investment.

The government has also pledged 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.

MCC will make an initial investment of up to $308.2 million, including funding to put the Electricity Company of Ghana, the country’s main distribution company, on a sustainable path, help the utility meet current electricity needs and upgrade infrastructure to reduce outages and improve service.

A second tranche of up to $190 million in funds will be made available if Ghana accomplishes a set of reform targets set forth in the Compact.