Ghana power company, Electricity Company of Ghana (ECG), is being taken over by a company out of the Philippines. According to reports, the takeover of ECG by Meralco Consortium will take effect on February 1.
The concession agreement, which is for a period of 20 years, entrusts the management of the company and thus the distribution of electricity in Ghana to the private company. It also specifies that the concessionaire holds 51% of the shares of the company while the Ghanaian state owns the remaining 49%.
Meralco will inject $580 million into the company which, at the time of the signing of the agreement, had an estimated debt of $407 million. It will also improve the management of the structure to make it more efficient.
The deal was one of the conditions for obtaining the Compact II Millennium Challenge Account. The Compact will provide $498.2 million for the Ghanaian energy sector, of which $342 million will be spent on ECG recovery.