Mahama Seeks $190m US Funding for Energy Reforms

President John Dramani Mahama has announced Ghana’s intent to renegotiate with the United States Government for the possible reinstatement of $190 million under the Millennium Challenge Corporation (MCC) Compact, previously allocated to the electricity sector.

During a courtesy call by Mr. Ousmane Diagana, World Bank Vice President for West and Central Africa, in Accra, President Mahama discussed the significance of the MCC funding. Mr. Diagana visited Accra to witness President Mahama’s inauguration at Independence Square on January 7.

President Mahama emphasized the urgent need to reform Ghana’s energy sector to reduce debt and enhance efficiency. He recalled signing the MCC agreement as Vice President under the late President Professor John Evans Atta Mills, aiming to position Ghana as Africa’s most efficient electricity producer and a major hub for power exports.

“Unfortunately, democracy has its dividends, but it also sometimes can be a curse,” President Mahama said.

“We left the government, and a new government took over the Millennium Challenge Compact. Next up, the last segment of it, which was providing efficiency in distribution, billing, metering, and all that. And of course, PDS is history now.”

He stressed the need to revisit the privatization of electricity distribution to inject private sector efficiency into the Electricity Company of Ghana (ECG).

“If we do not fix the Electricity Company of Ghana, we will continue to have a major problem with our whole power value chain,” he stated.

President Mahama revealed ongoing discussions with the MCC about reinstating the $190 million funding.

“I spoke to the Americans and met the Millennium Challenge Corporation, and we asked if they could reinstate the $190 million that they had devoted to that aspect of it. And they said the door is not closed,” he noted.

He also expressed interest in World Bank support should the MCC funding remain inaccessible. “If the World Bank can support us to finish that aspect of it, we can reduce the losses where it has to do with the independent power producers (IPPs),” he added.

To stabilize the sector in the interim, President Mahama pledged to restore transparency and reintroduce the cash waterfall mechanism while implementing necessary reforms.

Mr. Ousmane Diagana reaffirmed the World Bank’s commitment to Ghana’s socioeconomic development, emphasizing the importance of sustainable solutions for the energy sector.