MCC seeks to transform power sector in Ghana, others

The Millennium Challenge Corporation (MCC) in Washington recently launched its energy-focused investment outlooks for Ghana, Malawi and Tanzania. The event also highlighted general investment opportunities and the economic climate of the countries in Africa, particularly in the energy sector. 

Most African countries, including Ghana, do not have enough electricity for long term and sustainable growth. However, this major challenge is getting a huge boost from government and private investments facilitated by the MCC.

One boon will be the MCC’s Ghana Power Compact, a five year partnership with the US. It will provide Accra with the power and resources needed to reduce poverty and provide enough power for sustainable economic growth.

Under the agreement, the MCC said it will invest up to $498 million over the next five years to support the country’s commitment to transform its power sector. In turn, Ghana is committing $37.4 million of its own money. Additionally, Accra is expected to receive $4.6 billion from American and private investment firms in the coming years. The MCC said the compact is a holistic approach to Ghana’s energy challenges that will encompass distribution, generation and access to energy and will support Ghana’s effort to reduce climate change.

The investments in energy will help Ghana to have an increase in power supply and make more energy available for consumers.

MCC officials state the investments will also help to “reduce consumer electricity waste,” which they say is “one of the most cost-effective means to bridge the current gap between supply and demand.”

Seth Terkper, Ghana’s Minister of Finance and Economic Planning said the compact will not only improve his country’s power sector but the service industry as well. But for now he said it would be too soon to consider Ghana as Africa’s powerhouse.

“Going forward we are planning certainly to grow the economy and in the near future we will hopefully become a powerhouse. But we would be complacent in describing ourselves as such at this stage,” he emphasized.

“To provide a context, Ghana discovered oil and gas, and we have two gas fields coming on stream,” said Terper who added there are now state-led initiatives for pipelines and power processing plants. Those projects are open to private investment.