Minister Denies Media Report Over ECG

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Electricity Company of Ghana

The Ministry of Energy and Petroleum, has denied media reports that the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) are up for sale.

A statement signed by Mr Emmanuel Armah Kofi Buah, Minister of Energy and Petroleum and copied to Ghana News Agency on Monday said media reports claiming that ECG and NEDCo are up for sale in fulfillment of conditionalities attached to the second Millennium Challenge Compact (MCC) are false.

It said following the successful execution and implementation of the first compact which represented a refreshing new strategy for the transformation of agriculture and transport, Ghana has been selected among a few countries to benefit from a second Compact under the United States Government MCC having demonstrated commitment to strengthen good governance, economic freedom, elimination of extreme poverty and investment in its people.

?A growth diagnostic study (Constraints Analysis) identified three critical binding constraints to economic growth in Ghana which were; inadequate and unreliable supply of electricity, lack of access to credit and lack of access to secure land rights.

The statement said with the country?s challenges with electricity availability, sufficiency and reliability the Compact would focus on specific interventions in the power subsector aimed at increasing electricity access and reliability.

? The goal of the second Compact is to reduce poverty through economic growth in Ghana with interventions in the power sector,? it added.

It said over the past two years a multi-sectoral consultation process coupled with the constraint analysis study culminated in the determination that lack of access to power was the single largest constraint to economic development in the country.

?Following this constraint analysis, several Government Ministries, Departments and Agencies including, the Ministries of Finance and Energy and Petroleum, Parliamentary Select Committee on Mines and Energy, ECG, NEDCo, VRA, GRIDCo, Energy Commission, PURC, EPA and NDPC have through several engagements and interactions worked together to develop and shape Ghana?s second Compact?, it noted.

According to the statement, the Compact had been carefully developed to holistically address challenges in the entire power supply value chain, specifically in generation, transmission, distribution, sector regulation and capacity building, adding ?The programme has six projects designed to address the power supply constraints while enhancing efficiency, transparency and accountability in the power supply value chain.

It said the specific interventions would be ECG financial and operational turnaround project, NEDCO financial and operational turnaround project, access to electricity project, regulatory strengthening and capacity building project, power generation sector improvement Project as well as demand side management and energy efficiency project

The statement however noted that to address the constraint of inadequate and unreliable power supply, the power distribution companies were found to be critical.

It said the public was served by two distribution companies, ECG and the NEDCo had generally accepted that the distribution companies were financially unsound; have high losses and did not operate on sound commercial principles.

This makes it difficult to maintain assets and finance capital expenditures and deters private investment, leading to low quality service and high cost of electricity service provision.

?When the performance of the power distribution sector in Ghana improves with the supply of reliable power, it is expected that there would be increased access to power for social and economic activities.?

The Distribution and Access Projects under the Compact are therefore expected to result in the sustainable improvement of the operational and commercial performance of the electricity distribution companies through reduction of ?hidden costs?, increased investments and improved regulatory environment leading to increased access to electricity for social and economic uses,? the statement said.

It said all these were efforts aimed at resolving the country?s distribution challenges and should therefore not be seen as sale of ECG or NEDCo. GNA

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