Ghana’s second MCC process reaches intensive phase – Official

Daniel W. Yohannes - CEO of MCC
Daniel W. Yohannes – CEO of MCC

Ghana’s quest to get the second compact from the Millennium Challenge Corporation (MCC) is said to have reached its latter stages.

A top US official with knowledge on the Ghana compact has indicated that the process of finalizing the Ghana compact is in its intensive phase.

Already a constraints analysis, a concept note and a concept paper have all been completed on the Ghana compact and submitted to the US agency as at March 2013.

“We are now entering into a more intensive phase,” Deidra Fair James, Ghana Country Team Lead at MCC told in an interview last week in Accra.

According to Ms Deidra, the MCC is starting feasibility studies on the compact from next month.

In July this year, the MCC and the Government of Ghana signed an agreement for the award of $8 million for feasibility studies into the second compact which is focused on the energy sector.

Deidra said “We have feasibility studies on gas project… and looking at a study on potential private sector participation options for the Electricity Company of Ghana (ECG).”

She hoped all studies will be concluded by April 2014.

“We hope to conclude those studies by April next year to go to our Board of Directors to submit a compact for approval in June,” said Deidra who is at the MCC’s Department of Compact Operations, West Africa.

Even though it is an aggressive schedule, Ms Deidra Fair said the MCC looks forward to working with the Ghana government on these studies to ensure that “technically we have all the information that we need in order to move forward”.

She called for reforms in Ghana’s power sector in order to “make this compact work”.

Despite not been emphatic, Ms Deidra disclosed that Ghana will get around $300 million from the second compact. in December 2011 reported that Ghana was likely to get between $350 million and $400 million from the second compact, citing data released by the US Foreign Assistance Dashboard which was updated December 2, 2011. But Mr. Martin Eson-Benjamin, CEO of the Millennium Development Authority (MiDA), said the amount “could go up or it could come down,”

The Foreign Assistance Dashboard provides a view of U.S. Government foreign assistance funds and enables users to examine, research, and track aid investments in a standard and easy-to-understand format.

The Obama government has assured that the MCC cash will flow soon after negotiations complete.

In a teleconference on July 10, 2013, Gayle Smith, Special Assistant to the US President and Senior Director, National Security Council, said agreements under MCC compacts are negotiated carefully in terms of the substance as well as constraints analysis before implementation.

“So the money will start to flow as soon as those negotiations are completed,” Ms Smith answered in response to a question on the update of Ghana’s chance to get the MCC funds.

Ghana successfully completed a five-year $547 million compact with the MCC on February 15, 2012.

The second compact is expected to focus on the energy sector and the MCC will use part of President Obama’s $7 billion Power Africa initiative launched in South Africa to disburse funds for Ghana.

“Ghana will certainly be a part of Power Africa both through the MCC but through other means, as it’s been our view that there are not only electricity needs but the conditions are right to really expand on electricity access,” Ms Gayle said.

The MCC, through the ‘Power Africa’ initiative, has made a commitment of $1 billion in its compact funding towards the energy sector in Africa.

Compact investments are designed to address key constraints to growth in partner countries, and are selected based on their promise for raising incomes among the poor, according to officials.

By Ekow Quandzie

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