A recent meeting in New York between Ghanaian officials and the US Millennium Challenge Corporation (MCC) has revived discussions on a potential third development partnership. The Millennium Development Authority (MiDA), led by Alexander Kofi-Mensah Mould and Charles Abugre, met with MCC representatives, including Jason Small and Tariq Ahmed. The talks centered on reviewing Ghana's previous MCC-funded Compacts and exploring new areas of cooperation.
Ghana has previously benefited from two MCC-funded Compacts, which focused on agriculture, transportation, and power infrastructure. The second Compact, signed in 2014, invested $498.2 million in electricity infrastructure and sector reforms, delivering four major power substations. However, the program faced challenges, including the termination of a concession granting Power Distribution Services (PDS) operational control of the Electricity Company of Ghana (ECG).
The MCC has since reevaluated its approach to prospective partner countries, considering not only their development needs but also "American returns," including opportunities for increased US investment, exports, and supply chains involving critical minerals. Jason Small emphasized that Ghana's performance under the earlier program would be a crucial factor in any decision on a new Compact.
MiDA's Chief Executive Officer, Alexander Kofi-Mensah Mould, highlighted Ghana's electricity grid, distribution companies, and regional power integration as promising areas for renewed cooperation. He also suggested exploring natural gas infrastructure linking Ghana and Nigeria to support regional electricity generation. Small noted that MCC had previously studied proposed transmission interconnectors with Côte d'Ivoire and Burkina Faso.
A renewed partnership could bring fresh investment in grid reliability and cross-border electricity supply, directly benefiting households and businesses coping with power costs and outages. Ghana's earlier MCC Compacts brought hundreds of millions of dollars into agriculture, transport, and power infrastructure, shaping reforms such as quarterly automatic electricity tariff adjustments.
No new Compact or funding figure has been announced, and MCC's board will require further evidence and analysis before making a decision. Small stressed that any future investment must be justified by proof that the identified problem remains a major constraint on economic growth. MiDA intends to build on its institutional experience gained from implementing MCC-funded programs.
The potential new partnership between Ghana and MCC could have significant implications for the country's development, particularly in the energy sector. MiDA and MCC will need to work together to assess the viability of proposed projects and ensure that any new investment aligns with Ghana's broader development ambitions.
Key points
- The US Millennium Challenge Corporation (MCC) is considering a new development partnership with Ghana, focusing on energy and regional power integration.
- The potential partnership could bring fresh investment in grid reliability and cross-border electricity supply.
- Ghana's performance under previous MCC-funded programs will be a crucial factor in any decision on a new Compact.
