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NEDCO Fails to Seal $54 million Compact Fund Deal with MiDA

Northern Electricity Distribution Company (NEDCo) has failed to meet conditions to benefit the over US$ 54million, Millennium Challenge Compact Fund deal to improve private sector investment as well as productivity and profitability of small to medium and large scale business in the northern sector of the country.

NEDCo was to secure the US$54,191,650.00, Compact funds for its Financial and Operational Turnaround (NFOT) Project.
A press statement signed by the Head of Communication at the Ministry of Energy, Nana Kofi Oppong- Damoah indicated that, after several negotiation meetings between management, government and NEDCo staff , NEDCo could not meet the terms and condition under the facility.
“The Ministry has noted with concern NEDCo’s inability to access and utilize the USD 54,191,650.00 allocated Compact funds for NEDCo Financial and Operational Turnaround (NFOT) Project. The Ministry therefore wishes to use this press statement to provide the public, media and key stakeholders in the Energy Sector with the facts of the situation,” portion of the statement reads.
The Ministry further stated that, “despite all the efforts made by Government to secure the Compact Funds for NEDCo, the staff rejected the Management Contract mainly on the grounds that it involved the vesting of corporate-wide operational control in the Management Contract and the other related issues contained in the staff groups’ position on the NFOT Project.”
It added that, following NEDCo inability to access the Compact Funds as a result of the staff member protest against the deal, the NEDCo’s Financial and Operational Turnaround Project had to be reallocated to the construction of a Bulk Supply Point (BSP) at Kasoa.
“During a review meeting to define the current status of implementation of projects and to re-strategize towards effective utilization of Compact Funds on the projects that must be undertaken to meet the Compact’s goal and fulfill its objectives, the funds meant for NEDCo’s Financial and Operational Turnaround Project had to be reallocated to the construction of a Bulk Supply Point (BSP) at Kasoa,” it stated.
The statement revealed that, after the with the Compact Funds reallocated to another project, NEDCo would have to seek new funds either by borrowing or other financial arrangements in order to be able to implement projects intended to have been undertaken with the Compact Funds.
The Ministry however expressed fear that, NEDCo failure to utilize the Compact Funds would in a way negatively affect residents and customers in its catchment area.
The Compact Funds was approved after Ghana and the United States of America, acting through the Millennium Challenge Corporation (MCC) entered into a Millennium Challenge Compact on August 5, 2014.
The grant facility was to provides a financial support of US$498,200,000.00 to advance economic growth and reduce poverty in Ghana, under a five-year economic development program that would fund investments in the power sector.
The goal of the Compact is to reduce poverty through economic growth by increasing private sector investment, productivity and profitability of micro, small, medium and large scale busines.
It was also to increase employment opportunities for people in the area and as well raise earning potential from self-employment and improved social outcomes for both men and women.
The Program consists of six Projects including, Electricity Company of Ghana Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project and Regulatory Strengthening and Capacity Building Project.
The rest of the projects were Access Project, Power Generation Sector Improvement Project and Energy Efficiency and Demand Side Management Project.


The United States acting through MCC was to give a Grant of USD54, 191, 650.00 to Ghana to implement the NFTOT in some NEDCo Operational areas under the auspices of its accountable entity (MiDA).
The Government of Ghana on the other hand, was obliged to contribute USD11, 557, 005.00 thus bringing the total amount to USD65, 748, 655.00,while NEDCo was to benefit from a Grant of about USD65 million under the Compact for the implementation of the projects and programmes.

Source: therepublicnewsonline.com

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