Policy Update

US's MCC cancels US$190 million in grants to Ghana over failure to comply with power industry reforms

The Millennium Challenge Corporation (MCC) agreed in 2014 to provide Ghana with US$498 million to help stimulate investment in its power sector. This amount represented the largest grant under the United States' "Power Africa" initiative, which was established under President Barack Obama to bring electricity to tens of millions of African households.

As part of the agreement with Ghana, the state-run Electricity Company of Ghana (ECG) was to transfer operations to Ghana  Power Distribution Services (PDS), a consortium led by Philippine electricity company Meralco. Ghana's finance minister, however, informed the US that it would terminate the 20-year contract it had with PDS, citign dissatisfaction with payment guarantees. MCC views the contract termination as unjustified, and responded by canceling the US$190 million grant. The remaining US$308 million under the MCC agreement will still be disbursed. 

News article - Reuters