Ghana Power Compact

Through our $308 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 electricity to Ghana’s businesses and households. Our investment has already catalyzed nearly $3 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

Financials as of June 30, 2020

Compact Budget

Milestones

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

Compact Projects

Access Project

  • $900,000Project Total Amount
  • $899,311Project Amount Committed
  • $241,767Project Amount Expended

The Access Project will facilitate safe and legal access to reliable electricity in markets and economic enclaves in urban areas. Key interventions are the replacement of electrical systems in market areas, the provision of security lighting, and a facilitation and capacity building process aimed at formalizing connections and strengthening local market governance institutions.

Electricity Company of Ghana Financial and Operational Turnaround Project

  • $213,205,212Project Total Amount
  • $179,301,392Project Amount Committed
  • $75,877,423Project Amount Expended

MCC is supporting the Government of Ghana’s efforts to improve the management and efficiency of Ghana’s largest state-owned electricity distribution utility by bringing in a private sector operator and making investments in systems at the corporate level to improve overall service quality. The project includes targeted regional infrastructure 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.

Projected Long-Term Results

  • Estimated Beneficiaries 4,800,000
  • Estimated Net Benefits $143,300,000

Energy Efficiency and Demand Side Management Project

  • $22,297,799Project Total Amount
  • $18,339,189Project Amount Committed
  • $6,399,954Project Amount Expended

MCC is supporting the Government of Ghana in offsetting demand for electricity by developing improved or new efficiency standards for appliances, encouraging education and more efficient energy use among consumers, investing in more efficient Government buildings, and exploring demand side management measures, like converting streetlights to more efficient LED technology.

Projected Long-Term Results

  • Estimated Beneficiaries 19,600,000
  • Estimated Net Benefits $95,800,000

Northern Electric Distribution Company Financial and Operational Turnaround Project

  • $0Project Total Amount
  • $0Project Amount Committed
  • $0Project Amount Expended

The project’s objective was to develop NEDCo into a utility that would contribute to economic growth in the northern region of Ghana by improving its ability to recover costs and provide service to customers in a timely and effective manner. The planned intervention to achieve this objective was to introduce Private Sector Participation (PSP) in the form of a management contract. As the PSP did not proceed, the project was ultimately cancelled although funding was spent for design of some infrastructure activities before it was cancelled.

Projected Long-Term Results

Power Generation Sector Improvement Project

  • $0Project Total Amount
  • $0Project Amount Committed
  • $0Project Amount Expended

This project was aimed at addressing issues related to inadequate and unreliable gas supply, lack of a gas sector master plan and credible off taker, uncoordinated capital expansion, as well as an unclear IPP framework. After rationalizing the project with other donor programs and existing commercial arrangements, the project was cancelled to reduce redundancy and unnecessary expense.

Projected Long-Term Results

Regulatory Strengthening and Capacity Building Project

  • $2,874,095Project Total Amount
  • $2,538,650Project Amount Committed
  • $2,201,650Project Amount Expended

MCC is working with the Government of Ghana to ensure that Ghana’s electricity sector regulators, the Energy Commission and the Public Utilities Regulatory Commission, have the resources and capacity they need to ensure that power services are reliable, affordable and high quality. This project includes support for key tariff studies, technical assistance and capacity building.

Projected Long-Term Results

As of August 14, 2020