Millennium Challenge Corporation suspends $190 million funding for Ghana’s energy sector

The US government, through MCC, halted a 20-year concession agreement involving the PDS in 2019.

The Millennium Challenge Corporation (MCC) has announced that it currently has no plans to continue operations in Ghana, effectively closing the chapter on Ghana’s Millennium Challenge Compact.

In March 2019, Ghana was on the verge of securing a major $190 million financing package, which was aimed at improving infrastructure and aiding the financial recovery of the energy sector. This was to be part of the second installment of MCC’s energy compact.

However, the US government halted the deal due to problems with a 20-year concession agreement involving Ghana’s Power Distribution Services (PDS), which was expected to take over operations of the Ghana Electricity Company. Ghana (ECG).

Citing the importance of private sector participation as a key reform, the US government suspended the transfer of funds when the deal collapsed.

Despite the resurgence of Ghana’s energy crisis and calls from experts for financial support to address the energy sector’s $1.5 billion debt to the Independent Power Producers (IPP), the MCC remains steadfast in his stance.

The situation was further worsened by the ECG’s inability to meet its renegotiated monthly power purchase commitments worth $43 million to the PIEs.

According to myjoyonline.com, Alice P. Albright, executive director of MCC, confirmed the closing of the pact with Ghana in a press conference organized by the United States Department of State on May 9, 2024.

He acknowledged that while a substantial amount of work had been done, he would receive no further support.

“We had a pact with Ghana and the pact is closed.”

“At this time, we don’t have any immediate plans to work in Ghana again, but we can always look again to see if Ghana might be an option,” he said.

He added that while Ghana is not an immediate focus, the MCC continues to participate in various energy pacts across Africa, with the aim of meeting the continent’s growing energy demands.

ID/MA

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