US ends investment in Ghana’s energy infrastructure

BOSTON, Massachusetts – In early June 2022, the United States completed a six-year, $316 million commitment to Ghana’s energy sector. First introduced in 2014, the MCC Ghana Power Compact provides sustainable energy infrastructure and technology that will power key public institutions. The Millennium Challenge Corporation (MCC), an independent foreign aid agency of the US government, and the government of Ghana orchestrated the commitment to assist Ghana’s energy infrastructure.

The United States and Ghana are key economic and political partners, with bilateral trade between the two countries expected to reach $2.7 billion in 2021. The completion of the Ghana Energy Compact is an important milestone for the people of Ghana and US foreign interests. -‘s.

the impact

The aid package supplied durable innovative medical equipment to four key departments at Ghana’s largest healthcare facility in Ghana, according to the MCC. Medical facilities require reliable sources of energy to perform surgeries, access electronic medical records, run portable water for sanitation purposes, and refrigerate vaccines and medicines. Replacing old, inefficient equipment can reduce consumption by 40% annually in major healthcare facilities.

The investment in Ghana’s energy infrastructure supported the construction of four power substations, providing electricity to more than 5 million Ghanaians, MCC reported. The Ghana Power Compact’s targeted infrastructure, such as LED street lights, will boost the economy and combat security concerns such as gender-based violence.

The Ghana Power Compact improved power systems among 10 markets. The power of shopping centers is essential to the fight against poverty. Poor energy sources make food storage unreliable, causing another setback in an unpredictable agricultural sector. Ghanaian farmers already face a credit crunch, and crop losses due to unreliable power could push low-income workers further into debt. The Ghana Energy Compact’s commitment to Ghana’s energy infrastructure is essential to poverty prevention.

In a statement from the US embassy in Ghana, Deputy Chief of Mission Nicole Chulick stressed that “for many Ghanaians, it’s simple: stable, reliable power keeps the lights on and creates economic opportunity.”

Education and Inclusion

Education and inclusion are fundamental to the mission. The Ghana Power Compact developed an academic curriculum on energy efficiency and technology in schools across Ghana.

Recruiting Ghanaian women scientists and engineers is a priority. According to MCC, an MCC-funded internship program trained 600 women from across the country, developing their scientific and professional skills. Half of these interns went on to work with companies directly involved in the compact’s infrastructure projects.

The Ghana Power Compact’s initiative to empower women in STEM can influence trends across the region. Women in STEM professional fields can reduce gender wage gaps and also benefit from environmental initiatives.

Studies have found that women in STEM tend to pay more attention to municipal issues, such as renewable energy and environmental protection. It is particularly important that women in the Global South take a leading role in climate science. Professional development of women in STEM can lead to gender-focused poverty reduction and social innovation globally.

Electricity utilization contracts

Moreover, the transition to self-sufficient sustainable energy sources is an important step for government agencies to escape from the crippling debt traps.

For years, exploitative power contracts with foreign corporations led to overcapacity in Ghana’s inefficient power sector. In 2019, the Ghanaian government paid more than $600 million for “power it couldn’t use.” Energy contracts are often negotiated behind closed doors. Ghana canceled its agreement with the Power Distribution Services (PDS) after the government said the deal was “tainted with fraud”.

As part of the agreement between MCC and the government of Ghana, private corporations are to be involved in the distribution of power in the country.

However, conditions must be in place to protect the people and economy of Ghana. Transparency is essential for efficient energy sectors in Ghana and around the world. Washington and Accra should push legislation that discloses power purchase agreements (PPAs) to ensure transparency as a global norm. Energy is at the heart of a strong economy. US markets benefit when trading allies are healthy and stable.

The transition to sustainable energy can counter the exploitative energy contracts that are draining Ghana’s economy. Along with self-sufficient energy production, state actors should adopt a policy that guarantees the transparency of PPAs. Countries around the world are suffering from unethical energy deals. Access to power is central to development goals and global ambitions for poverty reduction.

– Samson Heyer
Photo: Flickr

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