Ghana Power Compact

Through our $498 million compact, MCC is helping the Government of Ghana transform the power sector through private sector participation and key policy and institutional reforms that will provide more reliable and affordable power to Ghana’s businesses and households. Our investment has already catalyzed nearly $4 billion in new private investment that will support sustainable growth, including from a number of U.S. businesses.

The United States is among Ghana’s principal trading partners, with bilateral trade between the two countries reaching $1.2 billion in 2015. While Ghana has experienced strong economic growth over the past 10 years, the power sector has not kept up with increasing demand from businesses and consumers. A lack of affordable and reliable power is a real barrier to doing business in the country, holding back Ghana’s potential for private investment and partnership with American businesses.

Financials

Compact Budget

Milestones

  • Signed:
    August 6, 2014
  • Entry Into Force:
    September 6, 2016

Compact Projects

Access Project

  • $10,000,000Project Total Amount
  • $0Project Amount Committed
  • $0Project Amount Expended

The $10 million project will test the most cost-effective approaches to address barriers small and medium businesses face in obtaining safe and legal access to electricity. This small project is designed to be innovative; it will test and provide evidence on several different interventions aimed at reducing critical barriers to legal connections or other supply constraints for these businesses in a sample of markets and economic enclaves, with the intent of facilitating scale up of those interventions in the future.

Electricity Company of Ghana Financial and Operational Turnaround Project

  • $148,563,951Project Total Amount
  • $21,193,248Project Amount Committed
  • $4,169,039Project Total Amount

The aim of this project is to improve the management of this Ghanaian electricity distribution utility by bringing in a private sector operator and by making investments designed to reduce losses and improve service quality.

The project includes investments to attract private sector participation, support integrated power loss management, reduce distribution system vulnerability to theft and meter manipulation, lower thermal losses in the distribution systems, and reduce the frequency and duration of outages by introducing improved system protection and sectionalizing devices in the distribution system.

Energy Efficiency and Demand Side Management Project

  • $26,147,799Project Total Amount
  • $46,548Project Amount Committed
  • $46,548Project Amount Expended

The $25.4 million project will offset demand for electricity, which has exceeded supply in Ghana, and help consumers save money by improving energy efficiency, reducing peak demand, and increasing both local technical capacity for efficiency retrofits and awareness, and public understanding of energy efficiency in the country.

The project will:

  • develop and enforce energy-efficient standards and labels for priority appliances and equipment;
  • build energy auditing capacity in Ghana;
  • finance demonstration retrofits of select facilities;
  • conduct a public-awareness campaign to promote energy efficiency; and
  • convert streetlights in priority areas to highly efficient LED lighting.

Northern Electric Distribution Company Financial and Operational Turnaround Project

  • $54,191,650Project Total Amount
  • $0Project Amount Committed
  • $0Project Amount Expended

The project will initially provide $5 million in technical assistance to improve operations of the Northern Electric Distribution Company (NEDCo), a distribution utility that serves the northern regions of the country. MCC will evaluate economic rates of return for possible system and infrastructure investments no later than the conclusion of the first year of compact implementation. If resulting ERRs are acceptable, MCC will make additional investments up to $49.2 million.

Power Generation Sector Improvement Project

  • $15,501,500Project Total Amount
  • $0Project Amount Committed
  • $0Project Amount Expended

The $16.3 million project will address major constraints to private sector investment in generation. The project will leverage ongoing advisory support provided by USAID to operationalize Ghana’s “gas to power” plan and commercialize the country’s gas sector, support the implementation of an independent power producer framework, and potentially fund technical feasibility assessments.

Regulatory Strengthening and Capacity Building Project

  • $3,404,420Project Total Amount
  • $1,660,764Project Amount Committed
  • $260,911Project Amount Expended

The $5 million project aims to enhance economic growth opportunities by improving the regulatory monitoring and independent verification of power sector performance. The project will support studies that provide critical inputs in the review process and redesign of the tariff structure.

As of December 13, 2017