Parliament yesterday approved a concession agreement between the government and a consortium of investors, led by the Manila Electric Company (Meralco), for private-sector participation in the Electricity Company of Ghana (ECG) within the terms of the second Millennium Challenge Compact (MCC).
Under the agreement, the concessionaire will have the right to operate and expand the power distribution network.
There is also a bulk supply agreement by which the ECG will sell power under a portfolio of public/private agreement, while the rate the concessionaire will charge for power will be determined by the Public Utilities Regulatory Commission (PURC).
The approval of the agreement followed the presentation of the report of the Mines and Energy Committee, which recommended its approval.
The Chairman of the Mines and Energy Committee, Mr Emmanuel Kwasi Gyamfi, recalled that Ghana and the United States of America (USA), acting through the MCC, entered into the agreement on August 5, 2014.
He said the compact provided for a grant of up to US$498,200,000 to advance economic growth and reduce poverty in Ghana and also committed Ghana and the MCC to a five-year economic development programme that would fund investments in Ghana’s power sector.
He said the programme consisted of an ECG Financial and Operational Turnaround Project to lease out the assets of the company to private operators and grant a concession to a private investor/operator to manage the distribution business, including financing and procuring new investments, or partial or full privatisation.
The Minister of Energy, Mr Boakye Agyarko, said the previous government had indicated that there must be at least 20 per cent local participation in the concessionaire’s consortium.
He said on assumption of office,the present government directed that local participation in the consortium should not be less than 51 per cent, and that 51 per cent or more of the issued and outstanding shares must be held, directly or indirectly, by individuals who were citizens of Ghana.
Mr Agyarko said consequent to the position, the shareholding structure of the successful consortium was constituted as follows: Manila Electric (Meralco) of The Philippines, 30 per cent; Aenergia SA (Angola), 19 per cent; Santa Baron Ventures Ghana, 13 per cent; TG Energy Solution Ghana, 18 per cent; GTS Engineering Ghana Limited, 10 per cent, and TBK Ghana Limited, 10 per cent.