BOSTON, Massachusetts — In early June 2022, the United States completed a six-year $316 million commitment to Ghana’s energy sector. First presented in 2014, the MCC Ghana Power Compact provides sustainable energy infrastructure and technology that will power crucial public institutions. The Millennium Challenge Corporation (MCC), an independent U.S. government foreign assistance agency and the Ghanaian government orchestrated the commitment to aid Ghana’s energy infrastructure.
The United States and Ghana are key economic and political partners, with bilateral trade between the two nations reaching $2.7 billion in 2021. The completion of the Ghana Power Compact is an important milestone for the people of Ghana and U.S. foreign interests.
The Impact
The aid package supplied innovative sustainable medical appliances to four major departments at Ghana’s largest health care facility in Ghana, according to MCC. Medical institutions require reliable energy sources to conduct operations, access electronic medical records, flow portable water for sanitation purposes and refrigerate vaccines and medicines. The replacement of old inefficient appliances could reduce consumption by 40% annually at major health care 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. Ghana Power Compact targeted energy-efficient infrastructure such as LED streetlights will boost the economy and combat security concerns such as gender-based violence.
Ghana Power Compact upgraded energy systems among 10 markets. Powering trade centers is crucial for the fight against poverty. Tenuous power sources make food storage unreliable, causing another barrier in an unpredictable agricultural sector. Ghanaian farmers already face a lending crisis and the loss of a harvest due to unreliable energy could push low-income workers further into debt. The Ghana Power Compact’s commitment to Ghana’s energy infrastructure is essential for poverty prevention.
In a statement from the U.S. embassy of Ghana, Deputy Chief of Mission Nicole Chulick stressed that “to many Ghanaians, it is simple: stable and reliable power keeps the lights on and creates economic opportunities.”
Education and Inclusion
Education and inclusion are foundational to the mission. Ghana Power Compact developed an academic curriculum for energy efficiency and technology at schools across Ghana.
The recruitment of Ghanaian women scientists and engineers is a priority. An MCC-funded internship program trained 600 women from across the country, developing their hard science and professional skills, according to MCC. Half of these interns moved on to working with companies directly involved in the compact’s infrastructure projects.
Ghana Power Compact’s initiative to empower women in STEM could influence trends around the region. Women in professional STEM fields could decrease gender wage gaps and also benefit environmental initiatives.
Studies found that women in STEM tend to pay greater attention to communal issues, such as renewable energy and environmental protection. It is especially important that women in the Global South take a leading role in climate science. The professional development of women in STEM could lead to gender-focused poverty reduction and social innovation globally.
Exploitative Power Contracts
Furthermore, the switch to self-sufficient sustainable energy sources is an important step for state agencies to escape destructive 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 the “power it could not use.” Energy contracts often undergo negotiation behind locked doors. Ghana canceled its agreement with Power Distribution Services (PDS) after the government said the deal was “tainted with fraud.”
As part of the deal between the MCC and the Ghanaian government, private corporations must be involved in the country’s power distribution.
However, there must be conditions to protect Ghana’s people and economy. Transparency is crucial for efficient energy sectors in Ghana and around the world. Washington and Accra must push legislation that discloses power purchase agreements (PPAs) to ensure transparency as a global norm. Energy is at the center of a strong economy. U.S. markets benefit when trade allies are healthy and sustainable.
The transition to sustainable energy could counteract exploitative power contracts that drain Ghana’s economy. Along with self-sufficient energy production, state actors need to pass policy that guarantees the transparency of PPAs. Countries around the world are suffering from unethical energy agreements. Access to power is pivotal for development goals and global poverty reduction ambitions.
– Samson Heyer
Photo: Flickr