As government closes up in signing the concessionaire to take over management of Electricity Company of Ghana (ECG), stakeholders are calling on the government to release details of the amendment to the US$498 million Millennium Challenge Corporation (MCC) support for the country’s energy sector.
Although, many stakeholders who initially resisted the terms of the concessionaire expressed their satisfaction with new agreement made between government and the Millennium Development Authority (MiDA) where Ghana will control 51% of ECG to be the majority shareholder.
The Acting Executive Director of the Africa Centre for Energy Policy (ACEP), Mr Ben Boakye, in an interview called on the government to come out to publish the reviewed agreement.
“The government has to speak to stakeholders before making that major shift because it was based on stakeholder agitation that the review was done. Therefore, even before it goes to agree on anything, it has to listen to the stakeholders and speak to the workers but as we speak that hasn’t happened,” he said.
He said delaying the process and taking isolated decision would drag the whole process during which the consumer would suffer the most.
“We are paying so much for electricity because a lot is going to waste and the Electricity Company of Ghana (ECG) is not managing things well. We need to iron out the differences and get into business with the whole concession,” he said.
President Nana Addo Dankwa Akufo-Addo at the recent May Day celebrations said the government had amended the terms of the concession agreement, which required that Ghanaians own at least 51% of the concession.
The review also required that there should be no involuntary lay-offs as a result of the concession. On the tenure of the agreement the government said it had succeeded in reducing the years from 25 to 20.
The President was confident that the amendments met the aspirations of Ghanaians by protecting the jobs of workers and the control and viability of the ECG.
However, the Energy Minister, Mr Boakye Agyarko has said, the Ghanaian company that will take over the management of the Electricity Company of Ghana (ECG) under the Millennium Challenge Corporation (MCC) compact programme must invest at least US$500 million in the company,
He noted, this will help meet government’s plan of ensuring that Ghanaians have at least 51 percent stake in ECG, said.
He disclosed this after a stakeholder meeting on the Millennium Challenge Compact Programme in Accra.
“The Ghanaian entity must be able to come up with a minimum of $50 million a year for the next five years,” he stated.
He ruled out any government assistance to a Ghanaian firm wishing to raise this amount since the government wants to focus on other areas in terms of developing the economy.
“It’s not government’s money that should be put in this or such development,” he added.
In spite of the September deadline, uncertainties surround the agreement.
Mr Boakye said government must quickly convene a meeting with all stakeholders to make known its intention, apart from highlighting the issues.
“If you say 51 per cent Ghanaian, what structure is that? Are you going to list it, are you going to invite Ghanaian businesses who have money to team up and bid for it? What happens to companies who have been shortlisted for the concession arrangement for the past two years because, already, that process had started,” he quizzed.
The government signed the second MCC Compact named: “Ghana Power Compact” as part of measures to improve the power sector through the introduction of independent power producers and private distributors in electricity supply, as well as the privatisation of the ECG.
The deal requires that the ECG is given out to a private sector investor on a concession base for a period of time.
But, Mr. Agyarko maintained that 51 percent stake would also depend on the bids that would be put across by the six shortlisted concessionaires at the bidder’s conference on May 23.
The six firms or concessionaires will be responsible for the management, operation and investment in Electricity Distribution of ECG.
The firms that have been shortlisted are: MANILA ELECTRIC COMPANY ORTIGAS AVENUE; CH GROUP/ EDF SA/LMI HOLDINGS/VEOLIA SA; and ENGIE ENERGIE SERVICES.
The others are: BXC COMPANY GHANA LTD/ XIAOCHENG TECHNOLOGY STOCK COMPANY LIMITED /SHAANXI REGIONAL ELECTRIC POWER GROUP COMPANY LIMITED; ENEL S.P.A VIALE REGINA MARGHERITA 137; and THE TATA POWER COMPANY LIMITED/CDC GROUP PLC.
Mr Agyarko stated emphatically that government is not privatising ECG but looking for private sector participation. He added that the arrangement will still result in the government owning the assets through ECG.
The concessionaire, he stated will be required to invest some US$500 million in the company to upgrade it and return it to the state after 20 years.
The minister also assured that no worker will be laid off because there is a new investor.
Chief Executive of Millennium Development Authority (MiDA), Ing Owura Kweku Safo has noted that, they are hoping to settle on the new owner of ECG by the close of the year, for work to start from next year.
Ghana in 2014 signed an agreement, with the US government for the release of almost $500 million dollars to improve energy supply in the country.
The country has already started receiving part of the compact money to improve operations of ECG.
Source: Adnan Adams Mohammed