Wednesday, 23 October 2019

Ghana likely to lose over US$1.8bn funding in U.S supported projects


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Adnan Adams Mohammed

Unfortunately, Ghana is likely to lose close to US$2 billion (GHC10 billion) directly and indirectly from the United State of America government’s funded or assisted projects starting this year for attracting their pleasure in the handling of the power distribution concession agreement under the Power Compact Agreement, an energy expert has said.

The U.S government through the Millennium Challenge Corporation (MCC) announced their displeasure for the cancellation of the Power Distribution Services (PDS) consortium under the concessionaire arrangement to manage and maintain the southern sector electricity distribution in the country yesterday.

Officially, the Government of Ghana through the Information Ministry announced the cancellation of PDS agreement today at a presser. This returns the country’s over US$20 billion assets of the electricity distribution channels back to its original manager, that is, Electricity Company of Ghana (ECG).

In a breakdown analysis of the close to US$2 billion funding support Ghana is likely to lose from U.S, Mr Alex Mould, former Ghana National Petroleum Corporation (GNPC) and Executive Director with the Standard Chartered Bank gave an elaborative analysis.

“What we lose by cancelling the PDS contract and not working a solution with MCC is not just $190m but nearly $1.8bn. US $190m from the Ghana Power Compact; US$400m for the Regional Compact; US $500 Government Budgetary Support; US $580 from the concessionaire among others,” the renowned energy said in a statement.

This should be a worry to all well intended government, which mean well for its citizens in advancing socio-economic development and attracting investors, to reconsider its decision. 

The MCC, which is the financier of the Ghana Millennium Challenge Compact II (Power Compact), is telling the government of Ghana to reverse back the terminated PDS concession and restructure the consortium to ensure friendly investment climate for the lead concessionaire (Meralco) to operate.

MCC is just demanding that government through its transaction advisor to: keep the PDS contracts; change the undesired Local shareholder and replace them with institutions like SSNIT and or Ghana Infrastructure and Financing Fund (GIFF); bring in known world class foreign distribution companies (Meralco has been approved) and eliminate AEnergia SA, Mr Mould recounted.

“We simply goofed on such a serious transaction!!! This is a reflection of how serious we take things in our beloved country Ghana - led by our leaders whom we have placed so much Trust to do the right things;

“The focus is not Ghana First, but rather what “We” get from managing the assets of the state which normally results in short changing the Citizens of Ghana and to the detriment of our economy;

“Please don’t blame MCC, the rules of engagement were clear. MCC are just asking us to not take us back years.

“Let’s consider the option and lifeline given by MCC: - keep the PDS contracts, - change the undesired Local shareholder and replace them with institutions like SSNIT and or GIFF, - bring in known world class foreign distribution companies (Meralco has been approved) and eliminate AEnergia SA, the scarlet pimpernel in this deal”



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