The United States Embassy has emphasized its ongoing commitment to supporting Ghana's efforts to renegotiate a $190 million grant with the Millennium Challenge Corporation (MCC).

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This grant, which is part of the larger $316 million Ghana Power Compact signed in 2014, was initially intended to improve the country's electricity distribution system.

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However, in 2019, the grant was halted after the Electricity Company of Ghana (ECG) and Power Distribution Services (PDS) canceled their concession agreement.

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In response to the challenges facing the energy sector, President Mahama has expressed his intent to reopen discussions with the MCC, underscoring the importance of the energy sector to the nation's overall financial health, referring to it as the "Achilles' heel."

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In a recent statement to the press, U.S. Ambassador to Ghana Virginia Palmer reiterated her support for the restoration of the grant. She pointed out that both she and President Mahama share similar goals and that these discussions were part of their campaign dialogues.

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“The President and I have common goals on this, and we’ve had talks even during the campaign about the importance of this. He was in office when the Millennium Challenge Compact was first designed. Ghana should be a poster child for the Millennium Challenge Compact. It does govern well on behalf of its people,” Ambassador Palmer said.

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Ambassador Palmer also expressed disappointment about the cancellation of the third tranche of the grant and stressed the urgent need for reforms within ECG. She highlighted the significant financial losses that ECG faces, citing that the company is losing roughly $2.2 billion annually.

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“I was very sad, it was right before my time, but when that tranche was cancelled, I was sad for a number of reasons. The first is that, you know, the reform of ECG was very necessary. And that was something that came up in the National Economic Dialogue—was the fact that ECG is essentially losing $2.2 billion a year, which is equivalent to or more than what you get from the IMF. So that needs to be reformed, clearly,” she added.

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The Ambassador continued to support President Mahama’s decision to engage with the MCC once again and reaffirmed her commitment to helping Ghana regain the critical funds needed to transform the country’s energy infrastructure.

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“The major aim of the second compact was for the power sector to be whole and not in the red. And that hasn’t been achieved yet. And to be eligible for another compact, you have to pass the scorecard and, you know, govern well on behalf of your people. And having had a successful previous compact. So, we need to make sure that that can happen, and then I will very strongly advocate for another compact,” Palmer stated.

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The Ghana Power Compact, signed in 2014, was designed to tackle inefficiencies in the country’s power sector, investing in power infrastructure, improving energy efficiency, and encouraging economic growth. The goal was to address key challenges and ultimately improve the electricity supply for the nation.

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