Ghana: Government To Pump $300m Into Energy Sector

Wednesday, 19 October 2011 09:28

The government is sourcing $300 million from the Millennium Development Account (MDA) to fix the irregular and insufficient power supply challenges facing the country. The funds are expected from the country’s share of the second compact of the MDA, meant to support some selected developing countries including Ghana. When successful, the Ghana government would construct a 400 megawatt thermal plant in the next three years to reduce the over-reliance on hydropower generation which energy experts had described as unreliable in recent times because of climate change. The Country Director, Department of Compact Operations of the Millennium Challenge Corporation (MCC) of the United States of America (USA), Mrs Deirdra Fair, announced this at one of the workshops dubbed “Ghana and Mozambique; A closer look at Power Sector Development” during the US Africa Business Summit 2011. The Biennial summit, which was under the auspices of the Corporate Council of Africa, was meant to strengthen commercial relationships between the nations of Africa and the United States of America (USA). The Summit attracted scores of businesses leaders attracted scores of businesses leaders across the world who focused on activities concerning Ghana because of the country’s potential to become the fastest growing economy in the world from next year. Ghana’s energy demands are said to increase at about 10 per cent per annum while generation is far below, hence the frequent shortages which demand immediate solution. “The government of Ghana made the request for the funds to be channelled to support the energy sector and the MCC has agreed to do just that to help the country solve its energy problems”, Mrs  Fair said. From the first compact, Ghana received more than US$500 million which was used to support the agricultural sector, particularly, farmers in the non-traditional export sector, infrastructure development, among others. To qualify for the compact, a country must be one that adheres to strict democratic principles, good governance, rule of law among others things. Mrs Fair said the decision to support the energy sector of Ghana was as a result of the request made by the government and indicated that the MCC had accepted the government’s proposal and had also noticed that the MCC would release the funds when it was ready. She said the compact, after a review of the first one, had made some changes which would go a long way to benefit beneficiary countries. “We will also work with private partners and donors to increase the funds available to the MCC to make more funds available to support the projects proposed by the beneficiary countries including Ghana which has qualified  to benefit” she added . A Deputy Minister for Energy, Mr Kofi Buah, later explained to the Daily Graphic that most of the transmission lines in the country were obsolete and needed to be changed to enable them to carry the load from the increasing power generated for supplies. “This is one of the reasons the president, on the advice of strong team put together to draw Ghana’s proposal for the compact directed that we should source the funds to solve the challenges in the energy sector”, he said. Source: Daily Graphic