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MIDA documents and reports

1st February, 2017
11TH SPECIAL MEETING - Summary of Minutes

SUMMARY OF THE 11TH SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE MILLENNIUM DEVELOPMENT AUTHORIT...
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Program Implementation Agreement

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Ghana Power Compact

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Ghana Power Compact

Ghana Power Compact will directly support the energy sector strategic objectives to achieve power supply sufficiency including exports to neighboring countries, and also supply power for new oil and gas based industries.

The program objectives under Compact II will therefore focus on developing projects and initiatives that will address the constraints to the supply of adequate and reliable power. They will also seek to address the attendant socio-economic and gender issues that are related to electric power.

Listed below are the various projects and programs to be implemented. 

  1. ECG Financial and Operational Turnaround Project
  2. NEDCo  Financial and Operational Turnaround Project. 
  3. Regulatory Strengthening and Capacity Building Project
  4. Access Project
  5. Power Generation Sector Improvement Project. 
  6. Energy Efficiency and Demand side Management Project 
  7. Monitoring and Evaluation and Economics (M&EE)
  8. Environmental and Social Performance
  9. Social and Gender Integration.

For details of the activities and interventions under these projects and Programs kindly download the
 

Ghana Power Compact

ECG Financial and Operational Turnaround Project.

The ECG Financial and Operational Turnaround Project consists of five Activities(listed below) that, taken together, are intended to:
1. Reduce implicit subsidies (created by losses, underpricing and under-billing).
2. Ensure that ECG runs on sound commercial principles to become creditworthy and serve as a credible off-taker
    under power purchase agreements.
3. Ensure that ECG recovers its costs and invests in maintenance and expansion without requiring regular financial
    support from the Government.

The ECG Financial and Operational Turnaround Project pursues a two-pronged approach – strengthening the governance and management of ECG by bringing in an Acceptable Concessionaire and infrastructure and foundational investments designed to reduce technical, commercial, and collection losses and improve service quality.

(i) Private Sector Participation Activity
The Private Sector Participation (PSP) Activitywill bring in

  • Additional investment urgently required to improve the electric infrastructure.
  • Innovation and technology to enhance operational efficiency
  • Efficient capital expenditure to improve service delivery.

The PSP will be in the form of a Concession (of 20-30 years duration) during which the electric distribution network and other assets of ECG would be leased to the Concessionaire and ECG becomes an Asset holding Company. At the end of the Concession, all assets will be transferred back to ECG. Successful implementation of this activity will engender the following benefits to consumers:

  • Reliable power supply for domestic and industrial use.
  • Lower cost of services resulting in relatively stable end–user tariffs
  • Improved transparency and independence in the setting of regulated tariffs by the PURC
  • Over the medium term, improvements in ECG’s creditworthiness will enable the Company  acquire additional generation capacity from IPPs without, or with limited, recourse to government guarantees.

(ii) Modernizing Utility Operations Activity
The Modernizing Utility Operations Activity is designed to introduce modern tools to ECG, build the capacity of ECG’s staff to use the tools, and provide a robust communication network for ECG. It also includes a number of interventions aimed at network improvements.

Successful implementation of this activity will benefit consumers as follows:  

  • Improved operational efficiency through the use of new and improved ICT technologies for data capture, planning and implementation of projects.
  • Faster identification and resolution of technical challenges and improved customer satisfaction.

(iii) Reduction in Commercial Losses and Improvement of Revenue Collection Rates Activity
ECG loses a significant amount of money each year because of theft, illegal connections, meter tampering and other irregularities which cause inaccurate count of the energy used by a consumer. Another significant loss of revenue arises from collection inefficiency where energy used by consumers is not paid for. This activity, when successfully implemented, will reduce commercial and collection losses, and make more funds available to the power utility for continuous re-investment in the distribution infrastructure to meet energy demands.

(iv)Technical Loss Reduction Activity
Technical losses are essentially thermal losses in the wires and transformers that carry electricity from generating plants to consumers in homes, factories ans offices and depends on the characteristics of the electric network. The loss of energy in the existing electrical distribution network leads to huge losses in revenue for ECG, and deprives it of the much needed funds for re-investment in infrastructure. The interventions under this Activity will result in lowering these thermal losses and improve the financial position of ECG.

(v) Outage Reduction Activity
Outages cause ECG to lose money from unrealized electricity sales and undermine consumer confidence in the utility’s ability to provide reliable service. The Outage Reduction Activity will improve service and increase sales.

NEDCo Financial and Operational Turnaround Project.

The NEDCo Financial and Operational Turnaround Project consists of the same categories of Activities and many of the same interventions as have been presented for the ECG Financial and Operational Turnaround Project. However, given the different starting condition and outlook for NEDCo, there are some differences in approach summarized below.

The NEDCo Financial and Operational Turn­around Project will initially be confined to studies and technical assistance under the Private Sector Participation and Modernizing Utility Operations Activities below until the prospect of achieving an acceptable economic rate of return (“ERR”) can be demonstrated to the satisfaction of MCC, at which point the balance of the funding allocated to the NEDCo Financial and Operational Turnaround Project under the Multi-Year Financial Plan may be disbursed. Disbursements would be for the purpose of implementation of a set of strategic investments that satisfy standard MCC criteria for cost effective­ness, convey broad participation in the generation of incremental added value among beneficiaries, and meet other MCC environmental and social screen­ing criteria.

(i) Private Sector Participation Activity.
The Private Sector Participation Activity will pro­vide support for the design and execution of an Acceptable NEDCo PSP Transaction.

(ii) Modernizing Utility Operations Activity.
The Modernizing Utility Operations Activity is designed to introduce modern tools to NEDCo, build the capacity of  NEDCo's staff to use the tools, and provide a robust communication network for NEDCo. It also includes a number of interventions to support development of the integrated loss management approach to utility turnaround and to help NEDCo Target Regions within its service territory implement change as well as support NEDCo with program management of commercial and network improvements.

(iii) Reduction in Commercial Losses and Im­provement of Revenue Collection Rates Activity.
Proposed interventions for the Reduction in Com­mercial Losses and Improvement of Revenue Col­lection Rates Activity reflect the different needs of NEDCo as compared to those for ECG

(iv) Technical Loss Reduction Activity.
Technical losses represent the energy lost in the electrical distribution lines and equipment. The interventions under this Activity will result in lowering thermal losses for the primary and secondary distribution systems in the NEDCo Target Regions.

Beneficiaries
The primary beneficiaries are consumers of electric­ity engaged in productive activity located mainly in the NEDCo Target Regions. The pro­posed interventions are expected to reduce losses in added value in terms of lost income to the owners of businesses (or owner-operators as the case may be for informal activities) and wages because of service disruptions.

Regulatory Strengthening and Capacity Building Project

The Regulatory Strengthening and Capacity Building Project is aimed at improving the regulatory and policy environment, and consists of two main activities:

1. Sector Performance Monitoring  Capacity Building Activity.
This activity will provide capacity building to sector agencies such as PURC, Energy Commission and the Ministry of Power to enable them perform improved monitoring and supervision of the utilities.

2. Tariff Review and Regulation Activity.
This activity seeks to review and restructure the tariff to ensure a rigorous and responsive regulatory environment as well as strengthening ratemaking and other regulatory processes through tariff studies.

Against the backdrop of the need for Ghana’s Power Sector to be financially self-sustaining and less reliant on cross-subsidies, these activities will ensure a more transparent and responsive regulatory environment, which is key for sustainable national development. Utilities and investors will benefit greatly from good return on investment as a result of economic and cost-reflective tariffs, which ultimately improves the financial health of the power sector.

Access Project

The Access Project is designed to provide safe, quality and reliable electricity in some selected markets, economic enclaves and social institutions such as schools and health facilities. The project upon completion is expected to increase the number of new connections in the identified targeted areas by reducing barriers to obtaining legal connections leading to an increased economic growth.

Several benefits of the Project are foreseen. They include:
a) Security Improvement and Theft Reduction in Markets and Economic Enclaves:
The poor lighting systems in the selected markets and economic enclaves does not make it a safe environment for business. The Compact seeks to provide security lighting within the selected market and economic enclaves to deter theft and other criminal activities.

b) Reliability of Power:
Many markets and economic enclaves experience low voltages, which prevent the efficient use of electrical equipment  thereby  slowing down economic activity and growth. The Compact will implement infrastructure projects which will improve the voltage within the selected market and economic enclave. The upgrades will also remove unsafe connections thereby reducing the incidence of  fire outbreaks resulting from poor connections and overloaded networks.

c) Reduction in Power Theft:
Under the Access Project, all illegal connections in the targeted market and economic enclaves will be replaced with legal meters thereby reducing commercial losses in the selected market and economic enclaves.

d) Increased the supply of electricity for new customers:
The Access Project will also streamline the acquisition of energy meters for new customers in the selected markets and economic enclaves.

e) Institutional Strengthening:
As part of the project, effective stakeholder engagement with Market Associations, MMDA’s and ECG/NEDCo will be promoted, to enhance cooperation among the parties.

Power Generation Sector Improvement Project

The Power Generation Sector Improvement Project will support measures aimed at opening up the Power sector and making it attractive to private investors for additional generation capacity. The objective is to increase availability, reliability and expansion of cost-effective power generation. 

There are three sub-activities under this activity namely:
1. Operationalize the “Gas to Power” Value chain Activity: 
This activity will provide essential technical assistance to the Government to establish a sustainable, market-oriented gas sector in Ghana so that gas can serve as the principal fuel source to meet the growing demand for electricity at least cost. 

2. Facilitate Liquefied Natural Gas (LNG) Development Activity: 
This activity will support Government efforts at developing LNG as a medium to long-term measure in order to address short-falls in gas supply and to support the diversification of fuel for power generation.

3. Strengthen Sector Planning and IPP Framework Activity: 
This will support the development of a clear and transparent IPP framework and an Integrated Resilience Resource Plan (IRRP). The IRRP which will allow the sector to conduct more effective strategic planning and also ensure the competitive procurement of future IPPs in a structured and on a cost effective basis. Adequate and reliable fuel supply for powering the available thermal plants remains one of the most critical challenges facing Ghana’s power sector today. 

The interventions under this project, including addressing the fuel challenge will increase private investor confidence in the power sector, ultimately resulting in the provision of adequate and reliable power supply, which will boost business and industry efficiency, increase productivity, create more jobs and accelerate economic growth.

Energy Efficiency and Demand Side Management Project

Under this project, several policy initiatives and programs will be undertaken aimed at ensuring energy efficiency and conservation in the use of the available capacity.  These activities are organized into four groupings:

1. Development and Enforcement of Standards and Labels Activity – which will develop the regulation and enforcement for the use of higher efficiency appliances, aimed at saving overall energy consumption.

2. Improved Energy Auditing Activity – which will build national capacity in energy auditing through establishing training centres and implementing programs for evaluating energy consumption and determining ways to save and conserve energy.
 
3. Education and Public Information Activity - will sensitize the public about energy efficiency and conservation through behavioral change.

4. Demand Side Management Infrastructure Activity - which involves undertaking a pilot solar program and getting the public to  use solar systems for addressing the high lighting loads, as well as installation of energy efficient street lighting to replace existing high energy consuming street lights.

The project will significantly reduce peak demand, ensure adequate supply for all and reduce investments in expensive additional generation facilities. Increase in customer knowledge and use of energy efficiency products will result in savings for households and businesses.

Monitoring & Evaluation & Economics (M&EE)

A focus on results is at the heart of the Millennium Challenge Corporation (MCC) development model. As a result, Monitoring and Evaluation (M&E) is an important component of program design and is incorporated into all facets of Millennium Challenge Account (MCA) programs.

The objective of MiDA’s  M&E activities is to enhance the generation of good quality Monitoring and Evaluation evidence, which will be integrated into MiDA and MCC decision making processes to provide greater accountability and a strong evidence based decision making and learning.

Under the Ghana Power Compact, the M&EE Directorate has the responsibility for ensuring the implementation of the overall M&E strategy to periodically measure, report and communicate the performance, results and impact of the Compact to its stakeholders. This process is guided by the M&E Plan which:

  • Describes the program logic and expected results as well as estimates of economic rate of returns. Gives details about what impact the Compact and each of the 6 projects are expected to produce and how these effects will be achieved in the short, medium and long term;
  • Sets out data and reporting requirements and quality control procedures. Defines indicators, identifies data sources and frequency of data collection in order to define how results will be measured. Outlines information flow from projects to stakeholders both for public consumption and to inform decision-making and describes the mechanisms that ensures quality, reliability and accuracy of program performance information;
  • Establishes a performance monitoring framework. Establishes a process to alert implementers, MiDA management, stakeholders, and MCC to whether or not the program is achieving its major milestones during program implementation, and provides a basis for making program adjustments;
  • Describes the evaluation plan. Explains in detail how MiDA and MCC will evaluate whether or not the interventions achieve their intended results and expected impacts over time and;
  • Describes M&E staff roles and responsibilities.

Environmental and Social Performance

The objective of the environmental and social performance of the Ghana Power compact is to develop, adopt and implement a set of good environmental and social management systems consistent with best practice. This is critical for ensuring smooth running of project activities and avoids delays. It safeguards the safety and security of workers and the inhabitants of the affected communities, ensures cost effectiveness of planned interventions, achieves the buy-in of all key stakeholders and promotes sustainable development of planned interventions. It is again required by law to ensure all compact funded projects and activities comply with the applicable national laws and regulations of Ghana.

To this end, MiDA shall ensure that all projects are developed and implemented consistent with the requirements of the following: Ghana’s EPA laws and regulations (Act 490, 1994), applicable social and labor laws of Ghana, MCC environmental guidelines, MCC health and safety policy, MCC gender policy, and International Finance Corporation (IFC) performance standards on environment and social sustainability.

The project design will ensure that the principles of environmental and social soundness are adhered to at all times. This will be achieved by ensuring project design considers all possible alternatives with respect to the siting of power substations and routing of distribution lines.  This will help minimize potential environmental, health and safety impact on affected communities and reduce cost with respect to economic and social displacement of project-affected persons. MiDA will ensure that closer and effective collaboration is promoted betweenMiDA and all relevant stakeholders at the project design stage.

Finally, Site-specific Environmental and Social Impact Assessments (ESIA) will be developed for all activities identified as having the potential to adversely impact on the environment. Subsequent to this, relevant, adequate and site-specific Environmental and Social Management Plans (ESMP), Resettlement Action Plans (RAPs), Health and Safety Management Plans (HSMP) will be developed and implemented to mitigate and monitor risk associated with infrastructural activities.

Social and Gender Integration.

The Ghana Compact II recognizes that gender inequality is one of the major constraints to economic growth. Gender and Social Integration is therefore one of the key requirements for ensuring economic growth that effectively takes account of gender and social inclusion.

In Compact II, The Millennium Development Authority (MiDA) is ensuring equitable access to energy by using targeted approaches to take account of gender disparities in access to credit, land and information; affordable connection fee for vulnerable groups and women owned businesses; electrification of social infrastructure that offers high benefits to women; and promoting productive uses of energy for men and women. Through its partnership strengthening intervention MiDA will develop the capacity of trade associations, including market women associations to better engage in dialogue with their respective authorities and utility companies and voice their concerns. 

Objectives:
The MiDA Gender and Social Inclusion Directorate is responsible for ensuring a gender responsive and socially inclusive electricity delivery. The Directorate’s key areas of work are: 
• Promoting consultation and engagement with women, vulnerable groups CSOs, CBOs, government institutions
   and the private sector.
• Ensuring gender responsive and socially inclusive project implementation 
• Promoting institutional development of gender and energy organizations for improving gender and social
   inclusion practices, as well as advocating for change in gender relations in the energy sector.
• Enhancing the quality of gender and gender relations in MiDA.

The Compact requires the development of a Social and Gender Integration Plan (SGIP)to ensure systematic gender and social inclusion in Compact project and activities. It highlights particular social and gender-based constraints and risks across sectors that need to be 
mitigated, and identifies opportunities for enhancing benefits for women and potentially marginalized groups.

The SGIP has been developed to ensure systematic direction during the design, assessment, implementation, monitoring and evaluation of the Compact as a way of ensuring that women and men, including vulnerable groups, equally participate in and benefit from all Compact projects and activities. It also functions as a reference document for other sectors, Implementing Entities, Contractors, Consultants and Suppliers.

Benefits:
The benefits of addressing gender and social inclusion in Compact II include:
• Enhanced voice and agency of women and other disadvantaged groups /associations to demand for efficient and
   reliable electricity delivery.
• Improved personal security and reduction in violence against women, girls and other deprived groups.
• Safe and secure work environments, particularly in markets and economic enclaves. 
• Increased employment opportunities for women and disadvantaged groups in the electricity /energy sector.
• Enhanced earning potential for women and men
• Raised earning potential for self-employment for women from increased lighting and access to electricity leading
   to improved social outcomes for men and women.
• Increased productivity of women’s businesses through cost effective and reliable electricity supply.
• Greater recognition of women’s contributions to the energy sector.
• Equal opportunities for women and men in the workplace, businesses and energy sector as a whole.
• Improved career opportunities for young women and men in the energy sector
• Unequal gender relations within the energy sector transformed for the benefit diverse groups of women and
   men.
• Improved governance and representation of women in in senior management positions in the energy sector.
• Full participation of women in the energy sector.
• Improved workplace environment.
• Efficient and effective organizations.
• Stakeholder satisfaction. 

Ghanaians are encouraged to support Gender and Social Inclusion Activities at MiDA because our work contributes immensely to achieving a more socially inclusive and gender equitable society where poverty reduction will be attained through economic growth in Ghana.

Working through Partnerships

MiDA collaborates with stakeholders to achieve its objectives. Key stakeholders for its gender and social inclusion objectives are Gender and Energy organizations and institutions, networks and individual experts from government, civil society, educational institutions and the private sector.  

Implementing Entities

  • Electricity Company of Ghana (ECG)
  • Energy Commission (EC)
  • Public Utilities Regulatory Commission (PURC)
  • Ministry of Power
  • Ministry of Petroleum
  • Ministry of Gender, Children & Social Protection
  • Ministry of Education
  • Ministry of Local Government
  • Environmental Protection Agency (EPA)
  • Land Valuation Board
  • Ghana Standards Authority (GSA)
  • Volta River Authority (VRA)
  • National Development Planning 
  • Commission (NDPC)
  • Accra Metropolitan Assembly (AMA)