The Ghanaian company that will take over the management of the Electricity Company of Ghana (ECG) under the Millennium Challenge Corporation (MCC) compact programme must invest at least $500 million in the company, the Energy Minister has said.
This will help meet government’s plan of ensuring that Ghanaians have at least 51 percent stake in ECG, Mr Boakye Agyarko said.
He disclosed this after a stakeholder meeting on the Millennium Challenge Compact Programme in Accra.
“The Ghanaian entity must be able to come up with a minimum of $50 million a year for the next five years,” he stated.
He ruled out any government assistance to a Ghanaian firm wishing to raise this amount since the government wants to focus on other areas in terms of developing the economy.
“It’s not government’s money that should be put in this or such development,” he added.
Mr. Agyarko maintained that 51 percent stake would also depend on the bids that would be put across by the six shortlisted concessionaires at the bidder’s conference on May 23.
The six firms or concessionaires will be responsible for the management, operation and investment in Electricity Distribution of ECG.
The firms that have been shortlisted are; 1. MANILA ELECTRIC COMPANY ORTIGAS AVENUE, PASIG CITY 0300 PHILIPPINES
2. CH GROUP/ EDF SA/LMI HOLDINGS/VEOLIA SA, 1 ALEMA STREET, AIRPORT RESIDENTIAL AREA, P. O. BOX AN 8743, ACCRA-GHANA
3. ENGIE ENERGIE SERVICES, SA, PLACE DES DEGRES 92800, PUTEAUX, FRANCE
4. BXC COMPANY GHANA LTD/ XIAOCHENG TECHNOLOGY STOCK COMPANY LIMITED /SHAANXI REGIONAL ELECTRIC POWER GROUP COMPANY LIMITED, P.O. BOX CT 8365, CANTONMENTS, OKODAN ROAD, ACCRA-GHANA
5. ENEL S.P.A VIALE REGINA MARGHERITA 137, 00198 ROME, ITALY
6. THE TATA POWER COMPANY LIMITED/CDC GROUP PLC, CORPORATE CENTRE “A” BLOCK, FOURTH FLOOR, 34 SANT TUKARAM ROAD CARNAC BUNDER MUMBAI -400 009 INDIA
Potential job losses and privatization of ECG
Mr Agyarko stated emphatically that government is not privatising ECG but looking for private sector participation. He added that the arrangement will still result in the government owning the assets through ECG.
The concessionaire, he stated will be required to invest some $500 million in the company to upgrade it and return it to the state after 20 years.
The minister also assured that no worker will be laid off because there is a new investor.
Possible timeline for new entity to take over ECG
Chief Executive of Millennium Development Authority (MiDA), Ing Owura Kweku Safo, told JOYBUSINESS they are hoping to settle on the new owner of ECG by the close of the year, for work to start from next year.
Ghana in 2014 signed an agreement, with the US government for the release of almost $500 million dollars to improve energy supply in the country.
The country has already started receiving part of the compact money to improve operations of ECG.