Home News Millennium Challenge Corporation halts $190 million funding for Ghana’s energy sector

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

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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.

Back in March 2019, Ghana stood on the brink of securing a significant $190 million funding package, which was earmarked for enhancing infrastructure and aiding the financial recovery of the energy sector. This was to be part of the second installment of the MCC power compact.

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

Citing the importance of private sector involvement as a key reform, the US government ceased the fund transfer when the agreement fell through.

Despite the reemergence of Ghana’s power crisis and calls from experts for financial support to address the energy sector’s $1.5 billion debt to Independent Power Producers (IPPs), the MCC remains firm in its stance.

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The situation was further worsened by the ECG’s inability to meet its renegotiated monthly energy purchase commitments of $43 million to the IPPs.

According to myjoyonline.com, Alice P. Albright, CEO of the MCC, confirmed the closure of the compact with Ghana at a press briefing organized by the U.S. Department of State on May 9, 2024.

She acknowledged that while a substantial amount of work was done, there would be no further support forthcoming.

“We did have a compact with Ghana, and the compact is closed.”

“Right now, we don’t have any immediate plans to work again in Ghana, but we can always look again to see if Ghana may be an option,” she said.

She added that while Ghana is not an immediate focus, the MCC continues to engage in various energy compacts throughout Africa, aiming to meet the continent’s growing energy demands.