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TREATIES AND OTHER INTERNATIONAL ACTS SERIES 16-906
 

FOREIGN ASSISTANCE 

Millennium Challenge 

Agreement Between the 

UNITED STATES OF AMERICA 

and GHANA 

Signed at Washington August 5, 2014 

with 

Annexes 
 

 

 

NOTE BY THE DEPARTMENT OF STATE 

Pursuant to Public Law 89—497, approved July 8, 1966 

(80 Stat. 271; 1 U.S.C. 113)— 

“. . .the Treaties and Other International Acts Series issued 

under the authority of the Secretary of State shall be competent 

evidence . . . of the treaties, international agreements other than 

treaties, and proclamations by the President of such treaties and 

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime 

jurisdiction, and in all the tribunals and public offices of the 

United States, and of the several States, without any further proof 

or authentication thereof.” 
 

 

 

 

 

 

GHANA 

Foreign Assistance: Millennium Challenge 

Agreement signed at Washington 

August 5, 2014; 

Entered into force September 6, 2016. 

With annexes. 
MILLENNIUM CHALLENGE COMPACT 


BETWEEN 


THE UNITED STATES OF AMERICA 


ACTING THROUGH 


THE MILLENNIUM CHALLENGE CORPORATION 


AND 


THE REPUBLIC OF GHANA 

MILLENNIUM CHALLENGE COMPACT 


TABLE OF CONTENTS 


Article 1. Goal and Objectives .......................................................................................... 1 


Section 1.1 Compact Goal ............................................................................................. 1 


Section 1.2 Program Objectives..................................................................................... 1 


Section 1.3 Project Objectives ....................................................................................... 2 


Article 2. Funding and Resources ................ ···.······· ........................................................... 2 


Section 2.1 Program Funding ........................................................................................ 2 


Section 2.2 Compact Implementation Funding ............................................................. 2 


Section 2.3 MCC Funding ............................................................................................. 3 


Section 2.4 Disbursement .............................................................................................. 3 


Section 2.5 Interest......................................................................................................... 3 


Section 2.6 Government Resources; Budget ................................................................. 3 


Section 2.7 Limitations on the Use ofMCC Funding ................................................... 4 


Section 2.8 Taxes ........................................................................................................... 4 


Section 2.9 Bilateral Agreement .................................................................................... 5 


Article 3. Implementation ................................................................................................. 5 


Section 3.1 Program Implementation Agreement .......................................................... 5 


Section 3.2 Government Responsibilities ...................................................................... 5 


Section 3.3 Policy Performance ..................................................................................... 6 


Section 3.4 Accuracy of Information............................................................................. 6 


Section 3.5 Implementation Letters ............................................................................... 6 


Section 3.6 Procurement and Grants.............................................................................. 7 


Section 3.7 Records; Accounting; Covered Providers; Access ..................................... 7 


Section 3.8 Audits; Reviews .......................................................................................... 8 


Article 4. Communications ............................................................................................... 9 


Section 4.1 Communications ...... : ..: ............................................................................... 9 


Section 4.2 Representatives ........................................................................................... 9 


Section 4.3 Signatures........................................................................................ , ......... 10 


Article . . S . E . . 5. Termmation; uspens1on; xpirat1on ............................................................. 01 


Section 5.1 Termination; Suspension .......................................................................... 10 


Section 5.2 Consequences ofTermination, Suspension or Expiration ........................ 11 


Section 5.3 Refunds; Violation .................................................................................... 11 


Section 5.4 Late Payment Interest ............................................................................... 11 


Section 5.5 Survival ..................................................................................................... 11 


Article 6. Compact Annexes; Amendments; Governing Law ........................................ 12 


Section 6.1 Annexes..................................................................................................... 12 

Section 6.2 
 Amendments and Modifications ............................................................... 12 


.......................................................................................... 12 


......................................................................................... 12 


.............................................................................. 12 


..................................................................... 13 


...................... 13 


............................................................................................... 13 


Section 6.3 
 Inconsistencies 

Section 6.4 
 Governing Law 

Section 6.5 
 Additional Instruments 

Section 6.6 
 References to MCC Website 

Section 6.7 
 References to Laws, Regulations, Policies and Guidelines 

Section 6.8 
 MCC Status 

Article 7. 
 Entry Into Force .............................................................................................. 13 


Section 7.1 
 International Agreement ........................................................................... 13 


................................................. 13 


........................................................................... 14 


.......................................................................................... 14 


............................................................................ 14 


Section 7.2 
 Conditions Precedent to Entry into Force 

Section 7.3 
 Date ofEntry into Force 

Section 7.4 
 Compact Term 

Section 7.5 
 Provisional Application 

Article 8. 
 Tranche II Funding and Additional Government Responsibilities ................. 15 


Section 8.1 
 Conditions Precedent to Initial Tranch II Funding Disbursement.. .......... 15 


Section 8.2 
 Failure to Satisfy Conditions Precedent to Initial Tranche II


Section 8.3 
 Additional Government Responsibilities .................................................. 15 


Funding ..................................................................................................... 15 


Annex I: Program Description 

Annex II: Multi-Year Financial Plan Summary 

Annex III: Description ofthe Monitoring and Evaluation Plan 

Annex IV: Conditions to Disbursement of Compact Implementation Funding 

AnnexV: Definitions 

Toe-ii 
MILLENNIUM CHALLENGE COMPACT 

PREAMBLE 

This MILLENNIUM CHALLENGE COMPACT (this "Compact') is between the 

United States ofAmerica, acting through the Millennium Challenge Corporation, a United States 

government corporation ("MCC'), and the Republic of Ghana ("Ghana"), acting through its 

government (the "Government") (individually, a "Party" and collectively, the "Parties"). 

Capitalized terms used in this Compact will have the meanings provided in Annex V. 

Recalling that the Parties successfully concluded an initial Millennium Challenge 

Compact (which entered into force on February 16, 2007 and terminated by its terms on 

February 16, 2012) that advanced the progress of Ghana in achieving lasting economic growth 

and poverty reduction, demonstrated the strong partnership between the Parties, and was 

implemented in accordance with MCC's core policies and standards; 

Recognizing that the Parties are committed to the shared goals of promoting economic 

growth and the elimination of extreme poverty in Ghana and that MCC assistance under this 

Compact supports Ghana's demonstrated commitment to strengthening good governance, 

economic freedom and investments in people; 

Recalling that the Government consulted with the private sector and civil society of 

Ghana to determine the priorities for the use ofMCC assistance and developed and submitted to 

MCC a proposal for such assistance to achieve lasting economic growth and poverty reduction; 

and 

Recognizing that MCC wishes to help Ghana implement the program described herein to 

achieve the goal and objectives described herein (as such program description and objectives 

may be amended from time to time in accordance with the terms hereof, the "Program"); 

The Parties hereby agree as follows: 

ARTICLE 1. 

GOAL AND OBJECTIVES 

Section 1.1 Compact Goal. The goal ofthis Compact is to reduce poverty through economic 

growth in Ghana (the "Compact Goar'). MCC's assistance will be provided in a manner that 

strengthens good governance, economic freedom, and investments in the people ofGhana. 

Section 1.2 Program Objectives. The objectives ofthe Program (the "Program Objectives") 

are to: 

(a) increase private sector investment and the productivity and profitability ofmicro, 

small, medium and large scale businesses; 

(b) increase employment opportunities for men and women; and 

(c) raise earning potential from self-employment and improved social outcomes for 

men and women. 
The Program consists ofthe projects described in Annex I (each a "Projecf' and collectively, the 

"Projects"). 

Section 1.3 Project Objectives. The objective of each ofthe Projects (each a "Project 

Objective" and collectively, the "Project Objectives") is described in Annex III. 

ARTICLE2. 

FUNDING AND RESOURCES 

Section 2.1 Program Funding. 

Upon entry into force ofthis Compact in accordance with Section 7.3, MCC will grant to the 

Government, under the terms ofthis Compact, an amount not to exceed Four Hundred and Sixty 

Nine Million Three Hundred Thousand United States Dollars (US$469,300,000) ("Program 

Funding"), consisting of Two Hundred Seventy Nine Million Three Hundred Thousand United 

States Dollars (US$279,300,000) ("Tranche I Funding") and One Hundred and Ninety Million 

United States Dollars (US$190,000,000) ("Tranche II Funding"), for use by the Government to 

implement the Program. The allocation of Program Funding is generally described in Annex II. 

Section 2.2 Compact Implementation Funding 

(a) Upon the signing ofthis Compact, MCC will grant to the Government, under the 

terms ofthis Compact and in addition to the Program Funding described in Section 2.1, an 

amount not to exceed Twenty Eight Million Nine Hundred Thousand United States Dollars 

(US$28,900,000) ("Compact Implementation Funding") under Section 609(g) ofthe 

Millennium Challenge Act of2003, as amended (the "MCA Acf'), for use by the Government to 

facilitate implementation ofthis Compact, including for the following purposes: 

(i) financial management and procurement activities; 

(ii) administrative activities (including start-up costs such as staff salaries) and 

administrative support expenses such as rent, computers and other information technology or 

capital equipment; 

(iii) monitoring and evaluation activities; 

(iv) feasibility, design and other project preparatory studies; and 

(v) other activities to facilitate Compact implementation as approved by 

MCC. 

The allocation ofCompact Implementation Funding is generally described in Annex II. 

(b) In accordance with Section 7.5, this Section 2.2 and other provisions ofthis 

Compact applicable to Compact Implementation Funding will be effective, for purposes of 

Compact Implementation Funding only, as ofthe date this Compact is signed by MCC and the 

Government. 

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(c) Each Disbursement of Compact Implementation Funding is subject to satisfaction 

ofthe conditions precedent to such disbursement as set forth in Annex IV. 

(d) IfMCC determines that the full amount of Compact Implementation Funding 

available under Section 2.2(a) exceeds the amount that reasonably can be utilized for the 

purposes set forth in Section 2.2(a), MCC, by written notice to the Government, may withdraw 

the excess amount, thereby reducing the amount ofthe Compact Implementation Funding 

available under Section 2.2(a) (such excess, the "Excess CIFAmounf'). In such event, the 

amount of Compact Implementation Funding granted to the Government under Section 2.2(a) 

will be reduced by the Excess CIF Amount, and MCC will have no further obligations with 

respect to such Excess CIF Amount. 

(e) MCC, at its option by written notice to the Government, may elect to grant to the 

Government an amount equal to all or a portion of such Excess CIF Amount as an increase in the 

Program Funding, and such additional Program Funding will be subject to the terms and 

conditions ofthis Compact applicable to Program Funding. 

Section 2.3 MCC Funding. 

Program Funding and Compact Implementation Funding are collectively referred to in this 

Compact as "MCC Funding," and includes any refunds or reimbursements ofProgram Funding 

or Compact Implementation Funding paid by the Government in accordance with this Compact. 

Section 2.4 Disbursement. 

In accordance with this Compact and the Program Implementation Agreement, MCC will 

disburse MCC Funding for expenditures incurred in furtherance ofthe Program (each instance, a 

"Disbursement"). Subject to the satisfaction of all applicable conditions precedent, the proceeds 

ofDisbursements will be made available to the Government, at MCC's sole election, by (a) 

deposit to one or more bank accounts established by the Government and acceptable to MCC 

(each, a "Permitted Account') or (b) direct payment to the relevant provider of goods, works or 

services for the implementation ofthe Program. MCC Funding may be expended only for 

Program expenditures. 

Section 2.5 Interest. The Government will pay or transfer to MCC, in accordance with the 

Program Implementation Agreement, any interest or other earnings that accrue on MCC Funding 

prior to such funding being used for a Program purpose. 

Section 2.6 Government Resources; Budget. 

(a) In accordance with MCC's Guidelinesfor Country Contributions, the 

Government will make a contribution of no less than seven and one half percent (7.5%), in 

addition to any other fiscal cost to the Government, ofthe amount ofMCC Funding provided 

under this Compact towards meeting the Program Objectives and Project Objectives ofthis 

Compact. Annex II describes such contribution in more detail. In addition, the Government will 

provide all funds and other resources, and will take all actions, that are necessary to carry out the 

Government's responsibilities under this Compact. 

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(b) The Government will use its best efforts to ensure that all MCC Funding it 

receives or is projected to receive in each of its fiscal years is fully accounted for in its annual 

budget for the duration ofthe Program. 

(c) The Government will not reduce the normal and expected resources that it would 

otherwise receive or budget from sources other than MCC for the activities contemplated under 

this Compact and the Program. 

(d) Unless the Government discloses otherwise to MCC in writing, MCC Funding 

will be in addition to the resources that the Government would otherwise receive or budget for 

the activities contemplated under this Compact and the Program. 

Section 2.7 Li~itations on the Use ofMCC Funding. The Government will ensure that MCC 

Funding is not used for any purpose that would violate United States law or policy, as specified 

in this Compact or as further notified to the Government in writing, including but not limited to 

the following purposes: 

(a) for assistance to, or training of, the military, police, militia, national guard or 

other quasi-military organization or unit; 

(b) for any activity that is likely to cause a substantial loss of United States jobs or a 

substantial displacement ofUnited States production; 

(c) to undertake, fund or otherwise support any activity that is likely to cause a 

significant environmental, health, or safety hazard, as further described in MCC's Environmental 

Guidelines and any guidance documents issued in connection with such guidelines (collectively, 

the "MCC Environmental Guidelines"); or 

(d) to pay for the performance of abortions as a method offamily planning or to 

motivate or coerce any person to practice abortions, to pay for the performance of involuntary 

sterilizations as a method offamily planning or to coerce or provide any financial incentive to 

any person to undergo sterilizations or to pay for any biomedical research which relates, in whole 

or in part, to methods of, or the performance of, abortions or involuntary sterilization as a means 

offamily planning. 

Section 2.8 Taxes. 

(a) Unless the Parties specifically agree otherwise in writing, the Government will 

ensure that all MCC Funding is free from the payment or imposition of any existing or future 

taxes, duties, levies, contributions or other similar charges (but not fees or charges for services 

that are generally applicable in Ghana, reasonable in amount and imposed on a nondiscriminatory basis) ("Taxes") ofor in Ghana (including any such Taxes imposed by a national, 

regional, local or other governmental or taxing authority of or in Ghana). Specifically, and 

without limiting the generality ofthe foregoing, MCC Funding will be free from the payment of 

(i) any tariffs, customs duties, import taxes, export taxes, and other similar charges on any goods, 

works or services introduced into Ghana in connection with the Program; (ii) sales tax, value 

added tax, excise tax, property transfer tax, and other similar charges on any transactions 

involving goods, works or services in connection with the Program, (iii) taxes and other similar 

charges on ownership, possession or use of any property in connection with the Program, and 

(iv) taxes and other similar charges on income, profits or gross receipts attributable to work 

4 

performed in connection with the Program and related social security taxes and other similar 

charges on all natural or legal persons performing work in connection with the Program except 

(A) natural persons who are citizens or permanent residents of Ghana and (B) legal persons 

formed under the laws of Ghana (but excluding MiDA and any other entity formed for the 

purpose of implementing the Government's obligations hereunder). 

(b) The mechanisms that the Government will use to implement the principal tax 

exemption required by Section 2.8(a) are set forth in Schedule 5 ofthe Program Implementation 

Agreement. Such mechanisms may include exemptions from the payment ofTaxes that have 

been granted in accordance with applicable law, refund or reimbursement ofTaxes by the 

Government to MCC, MiDA or to the taxpayer, or payment by the Government to MiDA or 

MCC, for the benefit ofthe Program, of an agreed amount representing any collectible Taxes on 

the items described in Section 2.8(a). 

(c) Ifa Tax has been paid contrary to the requirements of Section 2.8(a) or 

Schedule 5 ofthe Program Implementation Agreement, the Government will refund promptly to 

MCC (or to another party as designated by MCC) the amount of such Tax in United States 

dollars or the currency of Ghana within ninety (90) days (or such other period as may be agreed 

in writing by the Parties) after the Government is notified in writing (whether by MCC or MiDA) 

that such Tax has been paid. Failure to refund such amount within the specified time will result 

in interest accruing on the unpaid amount in accordance with Section 5.4. 

(d) No MCC Funding, proceeds thereof or Program Assets may be applied by the 

Government in satisfaction of its obligations under Section 2.8(c). 

Section 2.9 Bilateral Agreement. All MCC Funding shall be considered United States 

assistance under the General Agreement for a Programme ofTechnical Co-operation by and 

between the Government ofthe United States ofAmerica and the Government, dated June 3, 

1957, as amended from time to time (the "Bilateraf Agreemenf'). Ifthere are conflicts or 

inconsistencies between any parts ofthis Compact and the Bilateral Agreement, as either may be 

amended from time to time, the provisions ofthis Compact shall prevail over those ofthe 

Bilateral Agreement. 

ARTICLE3. 

IMPLEMENTATION 

Section 3 .1 Program Implementation Agreement. The Parties will enter into an agreement 

providing further detail on the implementation arrangements, fiscal accountability and 

disbursement and use ofMCC Funding, among other matters (the "Program Implementation 

Agreement' or "PIA"); and the Government will implement the Program in accordance with this 

Compact, the PIA, any other Supplemental Agreement and any Implementation Letter. 

Section 3.2 Government Responsibilities. 

(a) The Government has principal responsibility for overseeing and managing the 

implementation ofthe Program. 

(b) The Government hereby designates the Millennium Development Authority, as 

the accountable entity to implement the Program and to exercise and perform the Government's 

5 

right and obligation to oversee, manage and implement the Program, including without 

limitation, managing the implementation of Projects and their Activities, allocating resources and 

managing procurements. Such entity will be referred to herein as "MiDA," and has the authority 

to bind the Government with regard to all Program activities. The Government hereby also 

designates MiDA to exercise and perform the Government's rights and responsibilities to 

oversee, manage and implement the activities defined in the Grant and Implementation 

Agreement, dated as ofAugust 7, 2013 (the "609(g) Agreement'). The designation ofthis 

Section 3 .2(b) will not relieve the Government of any obligations or responsibilities hereunder or 

under any related agreement, for which the Government remains fully responsible. MCC hereby 

acknowledges and consents to the designation in this Section 3 .2(b ). 

(c) The Government will ensure that any Program Assets or services funded in whole 

or in part (directly or indirectly) by MCC Funding are used solely in furtherance ofthis Compact 

and the Program unless MCC agrees otherwise in writing. 

(d) The Government will take all necessary or appropriate steps to achieve the 

Program Objectives and the Project Objectives during the Compact Term (including, without 

limiting Section 2.6(a), funding all costs that exceed MCC Funding and are required to carry out 

the terms hereof and achieve such objectives, unless MCC agrees otherwise in writing). 

(e) The Government will ensure that the Program is implemented and that the 

Government carries out its obligations hereunder with due care, efficiency and diligence in 

conformity with sound technical, financial, and management practices, and in conformity with 

this Compact, the Program Implementation Agreement, each other Supplemental Agreement and 

the Program Guidelines. 

(f) The Government grants to MCC a perpetual, irrevocable, royalty-free, worldwide, 

fully paid, assignable right and license to practice or have practiced on its behalf (including the 

right to produce, reproduce, publish, repurpose, use, store, modify, or make available) any 

portion or portions oflntellectual Property as MCC sees fit in any medium, now known or 

hereafter developed, for any purpose whatsoever. 

Section 3.3 Policy Performance. In addition to undertaking the specific policy, legal and 

regulatory reform commitments identified in Annex I (if any), the Government will seek to 

maintain and to improve its level ofperformance under the policy criteria identified in 

Section 607 ofthe MCA Act, and the selection criteria and methodology used by MCC. 

Section 3.4 Accuracy ofInformation. The Government assures MCC that, as ofthe date this 

Compact is signed by the Government, the information provided to MCC by or on behalfofthe 

Government in the course ofreaching agreement with MCC on this Compact is true, correct and 

complete in all material respects. 

Section 3.5 Implementation Letters. From time to time, MCC may provide guidance to the 

Government in writing on any matters relating to this Compact, MCC Funding or 

implementation ofthe Program (each, an "Implementation Letter"). The Government will use 

such guidance in implementing the Program. The Parties may also issue jointly agreed-upon 

Implementation Letters to confirm and record their mutual understanding on aspects related to 

the implementation ofthis Compact, the PIA or other related agreements. 

6 

Section 3.6 Procurement and Grants. 

(a) The Government will ensure that the procurement of all goods, works and 

services by the Government or any Provider to implement the Program will be in accordance 

with MCC's Program Procurement Guidelines (the "MCC Program Procurement Guidelines"). 

The MCC Program Procurement Guidelines include the following requirements, among others: 

(i) open, fair, and competitive procedures must be used in a transparent 

manner to solicit, award and administer contracts and to procure goods, works and services; 

(ii) solicitations for goods, works, and services must be based upon a clear and 

accurate description ofthe goods, works and services to be acquired; 

(iii) contracts must be awarded only to qualified contractors that have the 

capability and willingness to perform the contracts in accordance with their terms on a cost 

effective and timely basis; and 

(iv) no more than a commercially reasonable price, as determined, for 

example, by a comparison of price quotations and market prices, will be paid to procure goods, 

works and services. 

(b) Unless MCC otherwise consents in writing, the Government will ensure that any 

grant issued in furtherance ofthe Program (each, a "Granf') is awarded, implemented and 

managed pursuant to open, fair and competitive procedures administered in a transparent manner 

acceptable to MCC. In furtherance ofthis requirement, and prior to the issuance of any Grant, 

the Government and MCC will agree upon written procedures to govern the identification of 

potential Grant recipients, including, without limitation, appropriate eligibility and selection 

criteria and award procedures. Such agreed procedures will be posted on the MiDA website. 

Section 3. 7 Records; Accounting; Covered Providers; Access. 

(a) Government Books and Records. The Government will maintain, and will use its 

best efforts to ensure that all Covered Providers maintain, accounting books, records, documents 

and other evidence relating to the Program adequate to show, to MCC's satisfaction, the use of 

all MCC Funding and the implementation and results ofthe Program ("Compact Records"). In 

addition, the Government will furnish or cause to be furnished to MCC, upon its request, 

originals or copies ofsuch Compact Records. 

(b) Accounting. The Government will maintain and will use its best efforts to ensure 

that all Covered Providers maintain Compact Records in accordance with generally accepted 

accounting principles prevailing in the United States, or at the Government's option and with 

MCC's prior written approval, other accounting principles, such as those (i) prescribed by the 

International Accounting Standards Board, or (ii) then prevailing in Ghana. Compact Records 

must be maintained for at least five (5) years after the end ofthe Compact Term or for such 

longer period, if any, required to resolve any litigation, claims or audit findings or any applicable 

legal requirements. 

(c) Access. Upon MCC's request, the Government, at all reasonable times, will 

permit, or cause to be permitted, authorized representatives of MCC, the Inspector General of 

MCC ("Inspector Generaf'), the United States Government Accountability Office, any auditor 

7 

responsible for an audit contemplated herein or otherwise conducted in furtherance ofthis 

Compact, and any agents or representatives engaged by MCC or the Government to conduct any 

assessment, review or evaluation ofthe Program, the opportunity to audit, review, evaluate or 

inspect facilities, assets and activities funded in whole or in part by MCC Funding. 

Section 3.8 Audits; Reviews. 

(a) Government Audits. Except as the Parties may agree otherwise in writing, the 

Government will, on an annual basis (or on a more frequent basis ifrequested by MCC in 

writing), conduct, or cause to be conducted, financial audits of all disbursements ofMCC 

Funding covering the period from signing ofthis Compact until the following December 31 and 

covering each twelve-month period thereafter ending December 31, through the end ofthe 

Compact Term. In addition, upon MCC's request, the Government will ensure that such audits 

are conducted by an independent auditor approved by MCC and named on the list of local 

auditors approved by the Inspector General or a United States-based certified public accounting 

firm selected in accordance with MCC's Guidelines for Financial Audits Contracted by the 

Millennium Challenge Corporation's Accountable Entities issued and revised from time to time 

by the Inspector General (the "Audit Guidelines"). Audits will be performed in accordance with 

the Audit Guidelines and be subject to quality assurance oversight by the Inspector General. 

Each audit must be completed and the audit report delivered to MCC no later than ninety (90) 

days after the applicable audit period, or such other period as the Parties may otherwise agree in 

writing. 

(b) Audits ofOther Entities. The Government will ensure that MCC financed 

agreements between the Government or any Provider, on the one hand, and (i) a United States 

nonprofit organization, on the other hand, state that the United States nonprofit organization is 

subject to the applicable audit requirements contained in OMB Circular A-133, Audits ofStates, 

Local Governments, and Non-Profit Organizations, issued by the United States Office of 

Management and Budget; (ii) a United States for-profit Covered Provider, on the other hand, 

state that the United States for-profit organization is subject to audit by the applicable United 

States Government agency, unless the Government and MCC agree otherwise in writing; and 

(iii) a non-US Covered Provider, on the other hand, state that the non-US Covered Provider is 

subject to audit in accordance with the Audit Guidelines. 

(c) Corrective Actions. The Government will use its best efforts to ensure that each 

Covered Provider (i) takes, where necessary, appropriate and timely corrective actions in 

response to audits, (ii) considers whether the results ofthe Covered Provider's audit necessitates 

adjustment ofthe Government's records, and (iii) permits independent auditors to have access to 

its records and financial statements as necessary. 

(d) Audit by MCC. MCC will have the right to arrange for audits ofthe 

Government's use ofMCC Funding. 

(e) Cost ofAudits, Reviews or Evaluations. MCC Funding may be used to fund the 

costs of any audits, reviews or evaluations required under this Compact. 

8 

ARTICLE4. 


COMMUNICATIONS 


Section 4.1 Communications. Any document or communication required or submitted by 

either Party to the other under this Compact must be in writing and, except as otherwise agreed 

with MCC, in English. All such documents or communication must be submitted to the address 

of each Party set forth below or to such other address as may be designated by any Party in a 

written notice to the other Party. 

ToMCC: 

Millennium Challenge Corporation 

Attention: Vice President, Compact Operations 

(with a copy to the Vice President and General Counsel) 

875 Fifteenth Street NW 

Washington, DC 20005 

United States of America 

Facsimile: +l (202) 521-3700 

Telephone: +1 (202) 521-3600 

Email: VPOperations@mcc.gov (Vice President, Compact Operations) 

VPGeneralCounsel@mcc.gov (Vice President and General Counsel) 

To the Government: 

Millennium Development Authority 

Attention: Chairman ofthe Board 

4th Floor, Heritage Tower 

6th A venue, Ridge 

PMB MB 56, Ministries 

Accra, Ghana 

Facsimile: +233 302 666 579 

Telephone: +233 302 666 619 

ToMiDA: 

Millennium Development Authority 

Attention: Chief Executive Officer 

(with a copy to the General Counsel) 

4th Floor, Heritage Tower 

6th A venue, Ridge 

PMB MB 56, Ministries 

Accra, Ghana 

Facsimile: +233 302 666 579 

Telephone: +233 302 666 619 

Section 4.2 Representatives. For all purposes relevant to the implementation ofthis Compact, 

the Government will be represented by the individual holding the position of, or acting as, 

9 

Chairman ofthe Board of MiDA, and MCC will be represented by the individual holding the 

position of, or acting as, Vice President, Compact Operations (each of the foregoing, a 

"Principal Representative"). Each Party, by written notice to the other Party, may designate one 

or more additional representatives (each, an "Additional Representative") for all purposes 

relevant to the implementation ofthis Compact except Section 6.2(a). The Government hereby 

designates the Chief Executive Officer ofMiDA as an Additional Representative. MCC hereby 

designates the Deputy Vice President, Department of Compact Operations, Africa, as an 

Additional Representative. A Party may change its Principal Representative to a new 

representative that holds a position of equal or higher authority upon written notice to the other 

Party. 

Section 4.3 Signatures. Signatures to this Compact and to any amendment to this Compact 

will be original signatures appearing on the same page or in an exchange of letters or diplomatic 

notes. With respect to all documents arising out ofthis Compact (other than the Program 

Implementation Agreement) and amendments thereto, signatures may be delivered by facsimile 

or electronic mail and in counterparts and will be binding on the Party delivering such signature 

to the same extent as an original signature would be. 

ARTICLES. 

TERMINATION; SUSPENSION; EXPIRATION 

Section 5.1 Termination; Suspension. 

(a) Either Party may terminate this Compact without cause in its entirety by giving 

the other Party thirty (30) days' prior written notice. MCC may also terminate this Compact or 

MCC Funding without cause in part by giving the Government thirty (30) days' prior written 

notice. 

(b) MCC may, immediately, upon written notice to the Government, suspend or 

terminate this Compact or MCC Funding, in whole or in part, and any obligation related thereto, 

ifMCC determines that any circumstance identified by MCC, as a basis for suspension or 

termination (as notified to the Government in writing) has occurred, which circumstances 

include but are not limited to the following: 

(i) the Government fails to comply with its obligations under this Compact or 

any other agreement or arrangement entered into by the Government in connection with this 

Compact or the Program; 

(ii) an event or series of events has occurred that makes it probable that the 

Program Objectives or any ofthe Project Objectives will not be achieved during the Compact 

Term or that the Government will not be able to perform its obligations under this Compact; 

(iii) a use ofMCC Funding or continued implementation ofthis Compact or 

the Program violates applicable law or United States Government policy, whether now or 

hereafter in effect; 

(iv) the Government or any other person or entity receiving MCC Funding or 

using Program Assets is engaged in activities that are contrary to the national security interests of 

the United States; 

10 

(v) an act has been committed or an omission or an event has occurred that 

would render Ghana ineligible to receive United States economic assistance under Part I ofthe 

Foreign Assistance Act of 1961, as amended (22 U.S.C. 2151 et seq.), by reason ofthe 

application of any provision of such act or any other provision oflaw; 

(vi) the Government has engaged in a pattern of actions inconsistent with the 

criteria used to determine the eligibility of Ghana for assistance under the MCA Act; and 

(vii) the Government or another person or entity receiving MCC Funding or 

using Program Assets is found to have been convicted of a narcotics offense or to have been 

engaged in drug trafficking. 

Section 5.2 Consequences of Termination, Suspension or Expiration. 

(a) Upon the suspension or termination, in whole or in part, ofthis Compact or any 

MCC Funding, or upon the expiration ofthis Compact, the provisions of Section 4.2 ofthe 

Program Implementation Agreement will govern the post-suspension, post-termination or postexpiration treatment ofMCC Funding, any related Disbursements and Program Assets. Any 

portion ofthis Compact, MCC Funding, the Program Implementation Agreement or any other 

Supplemental Agreement that is not suspended or terminated will remain in full force and effect. 

(b) MCC may reinstate any suspended or terminated MCC Funding under this 

Compact ifMCC determines that the Government or other relevant person or entity has 

committed to correct each condition for which MCC Funding was suspended or terminated. 

Section 5.3 Refunds; Violation. 

(a) If any MCC Funding, any interest or earnings thereon, or any Program Asset is 

used for any purpose in violation ofthe terms ofthis Compact, then MCC may require the 

Government to repay to MCC in United States Dollars the value ofthe misused MCC Funding, 

interest, earnings, or asset, plus interest within thirty (30) days after the Government's receipt of 

MCC's request for repayment. The Government will not use MCC Funding, proceeds thereof or 

Program Assets to make such payment. 

(b) Notwithstanding any other provision in this Compact or any other agreement to 

the contrary, MCC's right under Section 5.3(a) to obtain a refund will continue during the 

Compact Term and for a period of(i) five (5) years thereafter or (ii) one (1) year after MCC 

receives actual knowledge of such violation, whichever is later. 

Section 5.4 Late Payment Interest. Ifthe Government fails to pay any amount under this 

Compact or the Program Implementation Agreement when due (including amounts under 

Section 2.8(c) and 5.3(a)), interest will be paid on such unpaid amount. Interest will accrue on 

such unpaid amount at a rate equal to the then current US Treasury Current Value of Funds Rate, 

calculated on a daily basis and a 360-day year from the due date ofsuch payment until such 

amount is paid in full. Any such payment will first be credited against interest due, and once the 

interest due amount is extinguished, then payments will be credited against outstanding principal. 

Section 5.5 Survival. The Government's responsibilities under this Section and Sections 2.7, 

2.8, 3.2(f), 3.7, 3.8, 5.2, 5.3, 5.4 and 6.4 will survive the expiration, suspension or termination of 

11 

this Compact, provided that the terms of Section 2.8 will survive for only one hundred and 

twenty (120) days following this Compact's expiration. 

ARTICLE6. 

COMPACT ANNEXES; AMENDMENTS; GOVERNING LAW 

Section 6.1 Annexes. Each annex to this Compact constitutes an integral part hereof, and 

references to "Annex" mean an annex to this Compact unless otherwise expressly stated. 

Section 6.2 Amendments and Modifications. 

(a) The Parties may amend this Compact only by a written agreement. 

(b) Notwithstanding subsection (a) ofthis Section 6.2, the Parties agree that the 

Government and MCC may, by written agreement which will enter into force upon signature, 

modify any Annex to (i) suspend, terminate or modify any Project or Activity, (ii) change the 

allocations offunds as set forth in Annex II as ofthe date hereof, (iii) modify the implementation 

framework described in Annex I, (iv) add, change or delete any indicator, baseline or target or 

other information set forth in Annex III as ofthe date hereof in accordance with the MCC M&E 

Policy, (v) add, delete or waive any condition precedent described in Annex IV; provided that, in 

each case, any such modification (A) is consistent in all material respects with the Program 

Objectives and Project Objectives, (B) does not cause the amount of Program Funding to exceed 

the aggregate amount specified in Section 2.1 (as may be modified by operation of 

Section 2.2( e )), (C) does not cause the amount of Compact Implementation Funding to exceed 

the aggregate amount specified in Section 2.2(a), (D) does not reduce the Government's 

responsibilities or contribution ofresources required under Section 2.6(a), and (E) does not 

extend the Compact Term. 

(c) The Parties understand that any modification of any Annex or to any other 

provision ofthis Compact pursuant to this Section 6.2 may be entered into by the Government 

without the need for further action by the Government (including any parliamentary action), or 

satisfaction of any additional domestic requirements of Ghana. 

Section 6.3 Inconsistencies. In the event of any conflict or inconsistency between: 

(a) any Annex and any ofArticles 1through8, such Articles 1through8, as 

applicable, will prevail; or 

(b) this Compact and any other agreement between the Parties regarding the Program, 

this Compact will prevail. 

Section 6.4 Governing Law. This Compact is an international agreement and as such will be 

governed by the principles ofinternational law. 

Section 6.5 Additional Instruments. Any reference to activities, obligations or rights 

undertaken or existing under or in furtherance ofthis Compact or similar language will include 

activities, obligations and rights undertaken by, or existing under or in furtherance of any 

agreement, document or instrument related to this Compact and the Program. 

12 

Section 6.6 References to MCC Website. Any reference in this Compact, the PIA or any other 

agreement entered into in connection with this Compact, to a document or information available 

on, or notified by posting on the MCC Website will be deemed a reference to such document or 

information as updated or substituted on the MCC Website from time to time. 

Section 6.7 References to Laws, Regulations, Policies and Guidelines. Each reference in this 

Compact, the PIA or any other agreement entered into in connection with this Compact, to a law, 

regulation, policy, guideline or similar document will be construed as a reference to such law, 

regulation, policy, guideline or similar document as it may, from time to time, be amended, 

revised, replaced, or extended and will include any law, regulation, policy, guideline or similar 

document issued under or otherwise applicable or related to such law, regulation, policy, 

guideline or similar document. 

Section 6.8 MCC Status. MCC is a United States government corporation acting on behalf of 

the United States Government in the implementation ofthis Compact. MCC and the United 

States Government assume no liability for any claims or loss arising out of activities or 

omissions under this Compact. The Government waives any and all claims against MCC or the 

United States Government or any current or former officer or employee of MCC or the United 

States Government for all loss, damage, injury, or death arising out of activities or omissions 

under this Compact, and agrees that it will not bring any claim or legal proceeding of any kind 

against any ofthe above entities or persons for any such loss, damage, injury, or death. The 

Government agrees that MCC and the United States Government or any current or former officer 

or employee ofMCC or the United States Government will be immune from the jurisdiction of 

all courts and tribunals of Ghana for any claim or loss arising out of activities or omissions under 

this Compact. 

ARTICLE 7. 

ENTRY INTO FORCE 

Section 7.1 International Agreement. The Government will proceed in a timely manner to 

complete all of its domestic requirements for this Compact to enter into force. The Parties 

understand that this Compact and the PIA, upon entry into force, will prevail over the domestic 

laws ofGhana. 

Section 7.2 Conditions Precedent to Entry into Force. Before this Compact enters into force: 

thereto; 

(a) the Program Implementation Agreement must have been signed by the parties 

(b) The Government must have delivered to MCC: 

(i) a letter signed and dated by the Principal Representative ofthe 

Government, or such other duly authorized representative ofthe Government acceptable to 

MCC, confirming that the Government has completed its domestic requirements necessary for 

this Compact to enter into force and that the other conditions precedent to entry into force in this 

Section 7 .2 have been met; 

13 

(ii) a signed legal opinion from the Attorney General of Ghana (or such other 

legal representative ofthe Government acceptable to MCC), in form and substance satisfactory 

to MCC; 

(iii) complete, certified copies of all decrees, legislation, regulations or other 

governmental documents relating to the Government's domestic requirements necessary for this 

Compact and the PIA to enter into force, which MCC may post on its website or otherwise make 

publicly available; 

(c) MCC shall not have determined, at the time ofthis Compact's entry into force, 

that the Government has engaged in a pattern of actions inconsistent with the eligibility criteria 

for MCC Funding; 

(d) The Government must have delivered to MCC evidence: 

(i) that the tender documents for an Acceptable ECG PSP Transaction have 

been released for competitive selection through an open and transparent process acceptable to 

MCC; 

(ii) ofsubstantial compliance with the Gas Action Plan, including providing 

copies ofthe executed agreements required in accordance with the Gas Action Plan; 

(iii) that a long term Gas Sector Master Plan, acceptable to MCC, has been 

approved by the Government; 

(iv) of substantial compliance with the Electric Distribution Utility Payment 

Action Plan; and 

(v) of approval and implementation ofquarterly tariff adjustments in 

accordance with the existing formula for each ofthe calendar quarters between the initial CIF 

Disbursement and entry into force ofthis Compact. 

For the avoidance of doubt, the conditions specified in this Subsection reflect policy 

commitments made by the Government prior to the execution ofthis Compact. 

Section 7.3 Date ofEntry into Force. This Compact will enter into force on the date ofthe 

letter from MCC to the Government in an exchange ofletters confirming that MCC has 

completed its domestic requirements for entry into force ofthis Compact and that the conditions 

precedent to entry into force in Section 7.2 have been met to MCC's satisfaction. 

Section 7.4 Compact Term. This Compact will remain in force for five (5) years after its entry 

into force, unless terminated earlier under Section 5.1 (the "Compact Term"). 

Section 7.5 Provisional Application. Upon signature ofthis Compact, and until this Compact 

has entered into force in accordance with Section 7.3, the Parties will provisionally apply the 

14 

terms ofthis Compact; provided that, no MCC Funding, other than Compact Implementation 

Funding, will be made available or disbursed before this Compact enters into force. 

ARTICLES. 

TRANCHE II FUNDING AND ADDITIONAL GOVERNMENT RESPONSIBILITIES 

Section 8.1 Conditions Precedent to Initial Tranche II Funding Disbursement. In addition to 

the relevant conditions set forth in the Program Implementation Agreement, each ofthe 

following conditions must be met to MCC's satisfaction prior to the initial Tranche II Funding 

Disbursement: 

(a) the Government must provide evidence that an Acceptable ECG PSP Transaction 

has achieved Financial Close and, if necessary, received approval from the Ghanaian Parliament 

to execute such Acceptable ECG PSP Transaction; 

(b) the Government must provide evidence ofsubstantial compliance with the Tariff 

Plan; and 

( c) the Government must provide evidence of substantial compliance with the 

Electric Distribution Utility Payment Action Plan. 

Section 8.2 Failure to Satisfy Conditions Precedent to Initial Tranche II Funding 

Disbursement. The conditions precedent to the initial Tranche II Funding Disbursement must 

have been satisfied no later than two (2) years after the date this Compact enters into force. If 

each ofthe conditions precedent to the initial Tranche II Funding Disbursement have not been 

satisfied within two (2) years after the date this Compact enters into force, then: 

(a) MCC will by written notice to the Government reduce the amount ofProgram 

Funding by the total amount ofTranche II Funding and de-obligate the total amount of 

Tranche II Funding from the Compact; and 

(b) Tranche II Funding will not be available to be reallocated to the Program during 

the Compact Term. 

Section 8.3 Additional Government Responsibilities. The Government will ensure that: 

(a) ECG or NEDCo does not enter into any financial arrangements that MCC 

reasonably determines would have a material adverse effect on ECG or NEDCo's business, 

operations, liabilities, conditions (financial or otherwise), or the prospects for carrying out the 

Acceptable ECG PSP Transaction or the Acceptable NEDCo PSP Transaction; and 

(b) except for electricity bills subject to debt recovery actions, unpaid electricity bills 

incurred since the signing ofthis Compact owed to ECG and NEDCo by the Agreed MDAs, will 

not be more than sixty (60) days past due. 

SIGNATURE PAGE FOLLOWS ON THE NEXT PAGE 

15 

IN WITNESS WHEREOF, each Party, by its duly authorized representative, has signed 

this Compact. 

Done at Washington, DC, United States ofAmerica, this 5th day ofAugust, 2014 in the English 

language only. 

FOR THE UNITED STATES OF FOR THE REPUBLIC OF GHANA 

AMERICA, ACTING THROUGH THE 

MILLENNIUM CHALLENGE 

CORPORATION 

Name: D aJ. yde Name: Seth Emmanuel Terkper 

Title: Chief Executive Officer Title: Minister ofFinance 

SIGNATURE PAGE TO MILLENNIUM CHALLENGE COMPACT 


BElWEEN THE UNITED STATES OF AMERICA 


ACTING THROUGH THE MILLENNIUM CHALLENGE CORPORATION 


AND THE REPUBLIC OF GHANA 

ANNEX I 

PROGRAM DESCRIPTION 

This Annex I describes the Program that MCC Funding will support in Ghana during the 

Compact Term. 

A. PROGRAM OVERVIEW 

1. Background and Consultative Process. 

(a) Background. 

Ghana was selected as eligible to develop this Compact prior to completion of a $54 7 million 

compact which entered into force in February 2007 and was completed in February 2012 and 

which aimed to reduce poverty by raising farmer incomes through private sector-led agribusiness 

development and to enhance the competitiveness of Ghana's agricultural products in regional 

and international markets through investments in agriculture, transportation and rural 

development (the "First Compact"). 

At roughly the same time it was named eligible to develop this Compact, Ghana was also named 

one offour countries to participate in the pilot for the Partnership for Growth ("Partnership for 

Growth"), an initiative intended to create the next generation of emerging markets through better 

coordinated and strategically focused United States Government ("USG'') programs and 

resources. Based on an analysis ofthe obstacles to economic growth ("Constraints Analysis"), 

conducted jointly by a team ofGovernment, United States Agency for International 

Development ("USAID") and MCC economists, three key constraints to economic growth were 

identified: insufficient and unreliable power, lack of access to credit, and insecure land use 

rights. The Government selected the power sector as the area offocus for its proposed second 

compact while the Partnership for Growth program in Ghana focuses on the power and credit 

sectors. 

(b) Consultative Process. 

Throughout the development ofthis Compact, the Government engaged in an inclusive 

consultative process, conducting consultations across Ghana and in the United States. Together 

with MCC, the Government has utilized several formal mechanisms to solicit direct input to 

inform project selection and design from relevant stakeholders at different steps in the process. 

Based on extensive consultation around the Constraints Analysis, the Government selected 

power as the binding constraint and focus for this Compact. This initial round of consultations 

led to even more extensive discussion while preparing concept notes and papers with the 

objective of(i) providing a platform for stakeholders to understand root causes ofproblems in 

the power sector, (ii) gathering experiential information from stakeholders to serve as the basis 

ofproposed compact investments, and (iii) providing information to garner support for the 

Program. Formats employed included round tables, workshops, public forums, interactive 

websites, and media interaction with a wide range of parties - utilities, Government 

representatives, legislators, industry and financial institutions, trade associations and unions, 
policy institutions and think tanks, academics, representatives of civil society and nongovernmental organizations, private citizens across the geographic regions of Ghana. 

There has been a high level of private sector engagement with meaningful results in both the 

United States and in Ghana. Companies represented in the private sector stakeholders group 

range from the gas sector to generation and distribution and include independent power 

producers, international banks and financial institutions, equipment suppliers, utility managers 

and international oil companies, among others. 

Public consultations have and are expected to continue into the implementation phase. Central to 

the Program is the introduction ofprivate sector participation in distribution, which requires 

consultation between the Government and the private sector. The Access Project depends on 

continued consultation with and feedback from potential beneficiaries and the distribution 

utilities in order to refine the interventions. The Energy Efficiency and Demand Side 

Management Project relies heavily on communications, public education and outreach to ensure 

the general public and targeted customer groups are aware of cost-effective energy saving 

opportunities. 

2. Description of Program and Beneficiaries. 

(a) Description. 

The Program consists of six Projects: (i) the ECG Financial and Operational Turnaround Project; 

(ii) the NEDCo Financial and Operational Turnaround Project; (iii) the Regulatory Strengthening 

and Capacity Building Project; (iv) the Access Project; (v) the Power Generation Sector 

Improvement Project; and (vi) the Energy Efficiency and Demand Side Management Project. 

These Projects respond to constraints to economic growth by aiming to improve the reliability 

and quality ofpower in Ghana. 

Each Project is generally described in Part B ofthis Annex I. Part B also identifies one or more 

Activities that will be undertaken in furtherance of each Project. 

(b) Beneficiaries. 

Each Project ofthe Compact is intended to further poverty reduction through economic growth. 

Specific beneficiaries are identified in greater detail in Part B ofthis Annex I. Estimated numbers 

of beneficiaries for each Project are presented in the table below. 

Short Term Estimated Long Term Estimated 

Project Beneficiaries Beneficiaries 

(During the Compact Term) (From the end of the 

Compact Term to 20 years 

thereafter) 

ECG Financial and Operational 

Turnaround Project 4.8 million 7.6 million 

NEDCo Financial and Operational 

Turnaround Project 1.4 million 2.2 million 

ANNEXl-2 
Project 

Short Term Estimated 

Beneficiaries 

Long Term Estimated 

Beneficiaries 

(During the Compact Term) (From the end of the 

Compact Term to 20 years 

Regulatory Strengthening and Capacity 

thereafter) 

Building Project (beneficiaries incorporated 

in ECG/NEDCo Financial and Operational NIA NIA 

Turnaround Projects) 

Access Project TBD TBD 

Power Generation Sector Improvement 

Proiect 19.6 million 41.8 million 

Energy Efficiency and Demand Side 

Management Project 19.6 million 41.8 million 

3. Environmental and Social Performance. 

All ofthe Projects will be implemented consistent with the MCC Environmental Guidelines, the 

International Finance Corporation Performance Standards on Environmental and Social 

Sustainability, the MCC Gender Policy, and Ghana's laws, regulations, licenses, and permits. 

Where there is a difference between these standards, the stricter applies. 

In this context, the Government will: (a) develop, adopt, and implement an Environmental and 

Social Management System ("ESMS") for MiDA and other Government agencies, as necessary, 

for all Compact Activities; (b) undertake, cooperate with or complete (as needed) necessary 

studies or plans including but not limited to Environmental and Social Impact Assessments 

("ESIA"), Environmental and Social Management Plans ("ESMP'), environmental and social 

audits, Resettlement Policy Frameworks ("RPF'), and Resettlement Action Plans ("RAP'); (c) 

ensure that Project-specific ESMPs are developed and all relevant measures contained in such 

plans are integrated into project design and the applicable procurement documents and associated 

finalized contracts; and ( d) implement appropriate environmental and social measures identified 

in such assessments or plans or developed to address environmental and social issues identified 

during compact implementation. All these actions will be completed in form and substance 

satisfactory to MCC. Unless MCC agrees otherwise in writing, the Government will fund all 

necessary costs of environmental and social mitigation measures (including, without limitation, 

costs ofresettlement) not specifically provided for, or that exceed the MCC Funding specifically 

allocated for such costs in the Multi-Year Financial Plan. 

4. Social and Gender Integration. 

To maximize the positive social impacts ofthe Projects, address cross-cutting social and gender 

issues such as human trafficking, child and forced labor, and HIV IAIDS, and ensure compliance 

with the MCC Gender Policy, the Government will: (a) develop a comprehensive social and 

gender integration plan which, at a minimum, incorporates the findings of a comprehensive 

social and gender analysis, identifies approaches for regular, meaningful and inclusive 

consultations with women and other vulnerable/under-represented groups, consolidates the 

findings and recommendations of Project-specific social and gender analyses and sets forth 

strategies for incorporating findings ofthe social and gender analyses into final Project designs 

ANNEXl-3 
as ap~rop~iate ("~oc~al and Gender Integration Plan"); and (b) ensure, through monitoring and 

coordmat1on durmg implementation, that final Activity designs, construction tender documents 

other bidding documents and implementation plans are consistent with and incorporate the ' 

outcomes ofthe social and gender analyses and Social and Gender Integration Plan. 

B. DESCRIPTION OF PROJECTS 

Set forth be~ow is a description of each ofthe Projects that the Government will implement, or 

cause to be implemented, using MCC Funding to advance the applicable Project Objective. In 

addition, specific activities that will be undertaken within each Project (each, an "Activity"), are 

also described. 

1. ECG Financial and Operational Turnaround Project. 

(a) Summary ofProject and Activities. 

The ECG Financial and Operational Turnaround Project consists of five Activities that, taken 

together, are intended to reduce implicit subsidies (created by losses, underpricing and underbilling), ensure ECG runs on sound commercial principles to become creditworthy and serve as a 

credible offtak:er under purchased power agreements, and ensure 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 ofECG by bringing in an Acceptable ECG PSP 

Provider through a form ofPSP coupled with 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 Activity will provide support for the design and execution of an 

Acceptable ECG PSP Transaction. Funding for this Activity is intended to cover the following 

interventions: 

(A) Transaction advisory services to (1) advise the Government in the 

design and implementation of an international tender to select an Acceptable ECG PSP Provider, 

supporting the Government until Financial Close; (2) assist with producing the relevant 

documents for the Acceptable ECG PSP Transaction in close collaboration and consultation with 

the relevant authorities in view ofthe Government's main objectives: (a) improved performance 

in the delivery of electricity services to be measured by specific key performance indicators, (b) 

mobilization of private investment, ( c) fostering of local private participation both in the capital 

ofthe utility and as outsourcing/subcontractors, and ( d) increase in competition in the ECG 

service area, in line with the development and consolidation ofthe utility through liberalization 

ofthe energy market for large consumers, progressively reducing the threshold used to allow 

users to contract directly with generators and/or introduction of commercialization companies in 

the ECG service area. 

ANNEXl-4 
. . (B) Assistance with targeted communications strategy, outreach, and 

consultation to gam support of stakeholders; 

(C) Consultation with management and employees of ECG to gain 


support for PSP; and 


(D) Consultancy to design the institutional set-up for the Acceptable 


ECG PSP Transaction. 


(ii) Modernizing Utility Operations Activity. 

The Modernizing Utility Operations Activity is designed to introduce modem tools to ECG, 

build the capacity ofECG's staff to use the tools, and provide a robust communication network 

for ECG. It also includes a number ofinterventions to support development ofthe integrated loss 

management approach to utility turnaround and to help ECG Target Regions within its service 

territory implement change as well as support ECG with program management of commercial 

and network improvements. Specific interventions include: 

(A) Installation of a Geographic Information System ("GIS") based 

distribution management system, grid digitization, and customer census to record and store basic 

data that includes distribution asset management, distribution system attributes and 

characteristics, customer locations and characteristics for planning purposes. 

(B) Installation of an Enterprise Resource Planning ("ERP') system 

and integration with existing enterprise applications for the purpose offacilitating the flow of 

information between business functions within ECG and managing connections to outside 

stakeholders. 

(C) Provision oftechnical assistance to strengthen Project 

implementation through the hiring ofqualified advisors in the following areas: (1) Senior 

Advisor for program direction and monitoring, with responsibility for supporting management 

with coordination between engineering, commercial and operations directorates; managing and 

controlling an integrated loss management support team; (2) Engineer Technical Advisor for 

planning and GIS implementation assistance for evaluation of losses, formulation of 

sectionalizing strategies, and performance improvement analyses; (3) Commercial Technical 

Advisor to support the loss control unit to become more effective in reducing commercial losses; 

and (4) Operations Technical Advisor to assist with coordination between the call center and the 

dispatch center, and to improve practices and procedures for restoration of service following 

outages. These advisors will work closely with ECG personnel to ensure capacity building and 

sustainable operations. 

(D) Upgrade ofdata center and communications network to assist ECG 

in creating a data center compatible with current industry standards and to better manage the 

network. 

ANNEX 1-5 
(E) Loss characterization study to distinguish between technical and 


commercial losses in the ECG Target Regions. 


(F) Technical assistance for tariff applications to provide ECG with 


the support and training needed to develop a rate case filing compliant with the Tariff Plan. 


. . (G) Institutionalizing gender responsiveness to support gender 

?ud~tm?, develop~ent of a gender policy at ECG and support activities for strengthening 

mstitut1onal capacity of ECG to implement a gender policy and enhance the capacity offemale 

employee associations through knowledge sharing, networking, and the development of 

internships and mentoring to university students in science and technology, particularly women. 

(H) Assistance to the ECG training center in Terna in the form of 

provision oftraining tools and development/updating of course curricula. 

(iii) Reduction in Commercial Losses and Improvement ofRevenue Collection 

Rates Activity. 

Commercial losses represent energy not billed to the customer due to irregularities causing 

inaccurate count ofthe energy used by a consumer. Collection inefficiency is another type ofloss 

that occurs when the energy registered as used by a consumer is not paid for. Specific 

interventions to address commercial losses include: 

(A) Creation ofservice connection standards and normalization of 

existing services to update existing standards with a new design; train ECG personnel to enforce 

the new standards; and repair and upgrade non-conforming services. 

(B) Strengthening the loss control program by providing the loss 

control units at ECG with the means (training, tools, and equipment) to more effectively reduce 

commercial losses. 

(C) Installation of automated meter reading meters at special load tariff 

service locations and on selected non-special load tariff service locations in the ECG Target 

Regions as well as installation ofmetering at critical nodes ofthe distribution system in the ECG 

Target Regions to provide ECG the ability to identify and monitor where technical and 

commercial losses are occurring. 

(D) Replacement oflegacy credit meters with pre-payment meters in 

the ECG Target Regions to improve collection efficiency and timely closing of monthly financial 

statements. 

(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 ECG Target Regions. Specific interventions include: 

ANNEX I-6 
(A) Updated distribution design and construction standards based upon 

currently accepted best practices to ensure compliance with international best practice for low 

loss and economical designs. 

(B) Low voltage bifurcation and network improvements to reduce the 

length ofthe low voltage circuits to ensure they do not exceed a length that affects the quality of 

service and a technical loss threshold. 

(C) Introduction ofreactive power compensation for primary 


substations to optimize power levels at 33/11 kV substations. 


(D) Installation of bulk supply points with feeders to existing primary 

substations to ease overloading based on the current demand forecast and to avoid rolling 

brownouts. 

(E) Installation ofprimary substations with interconnecting subtransmission links and medium voltage offloading circuits to help reduce technical losses and 

avoid extended outages caused by failures or maximum capacity reached at geographically 

adjacent substations. 

(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. The interventions under this Activity include: 

(A) Installation ofoutage management system to identify outage 

locations and causes and serve to reduce outage frequencies and durations. 

(B) Sectionalizing study ofECG Target Regions and automation of 

medium voltage networks and system control and data acquisition expansion to locate 

sectionalizing devices in the 11 kV network to reduce the geographic area affected by outages. 

(C) Provision ofspecialized vehicles, tools, and equipment required for 

fault clearance and restoration of outages in the ECG Target Regions. 

(b) Beneficiaries. 

The primary beneficiaries ofthe ECG Financial and Operational Turnaround Project are 

consumers of electricity engaged in productive activity in the ECG Target Regions. These 

regions generate over 22 percent ofthe gross domestic product ("GDP') ofGhana and represent 

more than 23 percent ofECG's total customers. The proposed interventions are expected to 

reduce losses in added value in terms oflost income to the owners ofbusinesses (or owneroperators as the case may be for informal activities) and wages because of service disruptions. 

ANNEXl-7 
(c) Environmental and Social Performance. 

According to MCC Environmental Guidelines, the ECG Financial and Operational Turnaround 

Project is likely to be considered a "Category B" project. The most likely environmental impacts 

arising from the ECG Financial and Operational Turnaround Project are (i) risks to worker health 

and safety in the construction and operation of distribution infrastructure and (ii) risks to 

community health and safety from construction and operation of distribution infrastructure. The 

social impacts that may be the most important are (i) involuntary resettlement (including 

economic or physical displacement, temporary or permanent) along rights of way for distribution 

lines or in the acquisition ofnew or expanded sites for bulk supply points or substations, and (ii) 

removal of unauthorized connections causing loss of access to electricity by paying customers 

with illegal connections. 

A Framework Environmental and Social Impact Assessment ("FESIA") and an Environmental 

and Social Management Framework ("ESMF') have been developed as part ofthe 609(g) 

Agreement to address the overall environmental and social issues associated with the 

rehabilitation ofthe distribution system; identify, screen and assess key risks; and propose 

appropriate measures to manage such risks and impacts. The ESMF focuses on qualitative 

impacts and general rules, regulations, and management and mitigation measures rather than on 

quantifying the impacts of site-specific interventions. In addition to the FESIA and ESMF, site 

specific ESIAs and/or ESMPs will be developed (as needed) when the precise project locations 

become known in order to assess and mitigate risks specific to those sites. 

A RPF has been undertaken as part ofthe 609(g) Agreement to lay the groundwork for later 

development ofregion and site-specific RAP to be developed under the Compact. 

(d) Social and Gender Integration. 

In line with the overall objective ofmodernizing ECG's operational practices, interventions 

under the Modernizing Utility Operations Activity coupled with other potential interventions 

recommended by the gender audit will ultimately provide policy frameworks to ensure equal 

opportunities for women and men, improve work place environment and promote the full 

participation ofwomen in the energy sector. 

(e) Donor Coordination. 

MCC has been engaged with the active group of donors investing in the power sector in Ghana. 

This Compact was developed with frequent consultation and input from these partners: IFC and 

Wo:dd Bank; African Development Bank; Agence Fran9aise de Developpement; and the Swiss 

Development Agency. 

(f) USAID and USG. 

Ghana is a pilot country for the Partnership for Growth. It is also one ofthe first countries 

selected to participate in the Power Africa initiative ("Power Africa"), a new platform that serves 

to focus attention on the importance of electricity to economic growth and places a strong 

emphasis on private sector investment in the energy sector. A table highlighting these 

partnerships follows: 

ANNEXl-8 
Partner Sub-Sector Involvement in Sector 

• Funding integrated resource plan 
 US AID 
 Distribution • 	 Providing technical assistance for change management within 

ECG 

• 	 Funding Private Sector Participation workshop Power Africa Distribution 

• 	 Potentially providing transaction support for IPPs 

• 	 Providing technical assistance to NEDCo for assessing 

management and operations capabilities, business and Distribution 

USTDA investment planning; and developing financing and and 

implementation strategies for the investment plan Transmission 

• 	 Funding ECG Smart Grid applications feasibility study 

• 	 Funding the Aboadze-Domunli-Prestea Transmission Line 

feasibility study 

USEXIM • 	 Funded $350 million Self-Help Electrification Program which Distribution 

focused on rural electrification. 

Sustainable Distribution • 	 Energy Access: ensure universal access to modem energy 

Energy for All services, to include electricity and clean cooking facilities 

(SE4ALL) 

(g) Sustainability. 

The goal ofthe ECG Financial and Operational Turnaround Project is to ensure that ECG is 

financially and operationally sustainable with the ability to self-finance its operations going 

forward with minimal support from the Government. The approach to ensure the sustainability of 

ECG is to bring on board an Acceptable ECG PSP Provider under a long term agreement with 

the Government. The physical investments contemplated under this Project are accompanied by 

changes in business processes and reinforcement through technical assistance and training. 

(h) Policy, Legal and Regulatory Reforms. 

The Program embodies a reform agenda for the energy sector and advances a set ofreforms that 

began in the 1990s. Full implementation ofthese reforms, especially PSP, in a timely manner is 

critical to the success ofthe Program. To ensure this, the Government must lead the reform 

supported by a reform unit within MiDA (the "Reform Unif'), working closely with ECG, 

NEDCo, and other Government entities to drive the day-to-day implementation ofthese reforms. 

As currently designed, the ECG Financial and Operational Turnaround Project addresses a 

number ofthe Government's policy objectives for the energy sector, more specifically: reducing 

technical and commercial losses in power supply; supporting the modernization and expansion of 

energy infrastructure to meet growing demand and ensure reliability; and improving the overall 

management, regulatory environment and operation ofthe energy sector. Introduction of PSP to 

ECG is intended to support modernization and to improve management and operations. With 

respect to future operations and financial viability ofthe sector, the Government has committed 

to become and remain current on its utility bills and to move over time toward cost reflective 

tariffs. 

ANNEXl-9 
2. NEDCo Financial and Operational Turnaround Project. 

(a) Summary of Project and Activities. 

The NEDCo Financial and Operational Turnaround Project consists ofthe same categories of 

Activities and many ofthe same interventions as have been presented above 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 ofreturn 

("ERR") can be demonstrated to the satisfaction ofMCC, at which point the balance ofthe 

funding allocated to the NEDCo Financial and Operational Turnaround Project under the Multiy ear 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 ofincremental 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. Funding for this Activity is intended to cover the 

following interventions: 

(A) Transaction advisory services to structure and bring the Acceptable 

NEDCo PSP Transaction to Financial Close; 

(B) Assistance with targeted communications strategy, outreach and 

consultation to gain support of stakeholders; 

(C) Consultation with management and employees ofNEDCo to gain 

support for PSP; 

(D) Consultancy to design the institutional set-up for the Acceptable 

NEDCo PSP Transaction; 

(E) Management contract for the Acceptable NEDCo PSP Provider; 

(F) Formalizing a financial plan, as required pursuant to Schedule 2 of 

the PIA, for a clear and transparent mechanism to cover NEDCo operating losses and capital 

expenditures; and 

(G) Developing a plan for the separation ofNEDCo from the Volta 

River Authority. 

ANNEXl-10 
(ii) Modernizing Utility Operations Activity. 

Similar to the interventions under the corresponding ECG Activity described above in 


paragraph l(a)(ii) of Part B ofthis Annex I, the proposed interventions are as follows: 


(A) Studies for the purpose ofidentification ofstrategic extensions of 

service and other asset improvements to (1) complement specific regional investments in 

agricultural development financed under the Feed the Future initiative ofUSAID and other 

Government and donor support and (2) facilitate growth in local industry, commerce and 

employment. 

(B) Customer census integrated with GIS based distribution 

management system and service normalization such that, for those consumers whose meter 

installations are improperly installed or located, the connection will be normalized to ensure 

integrity ofthe services. 

(C) Installation of a customer information system and integration with 

automated meter reading and prepayment metering system to integrate multiple business 

applications with which NEDCo will manage its core business functions. 

(D) Providing technical assistance and system monitoring/control to 

strengthen Project implementation through the hiring of qualified advisors in the following areas: 

(a) Senior Advisor with commercial experience for program direction and monitoring, having 

responsibility for supporting management with coordination between engineering and operations 

directorates; managing and controlling an integrated loss management support team; and 

supporting the commercial directorate on implementation of commercial loss reduction 

measures; and (b) Engineer and Operations Advisor to train and develop the engineering 

department in planning and cost effective measures to modem utility standards. These advisors 

will work closely with NEDCo personnel to ensure capacity building and sustainable operations. 

(E) Development of a dedicated data center to store customer service, 

energy sales, billing, collection, and other mission-critical information and a communication 

network for NEDCo, compatible with current industry standards to support improvements in 

network operations. 

(F) Loss characterization study to distinguish between technical and 

commercial losses in the NEDCo Target Regions. 

(G) Technical assistance for development ofrate case to provide 

NEDCo the support and training needed to develop a rate case compliant with the Tariff Plan. 

(H) Institutionalizing gender responsiveness to support gender 

auditing, development of gender policy at NEDCo and support activities for strengthening 

institutional capacity ofNEDCo to implement a gender policy and enhance the capacity of 

female employee associations through knowledge sharing, networking, and the development of 

internships and mentoring to university students in science and technology, particularly women. 

ANNEX I-11 

(iii) Reduction in Commercial Losses and Improvement of Revenue Collection 

Rates Activity. 

Proposed interventions for the Reduction in Commercial Losses and Improvement ofRevenue 

Collection Rates Activity reflect the different needs ofNEDCo as compared to those for ECG 

described above in paragraph l(a)(iii) of Part B ofthis Annex I and include: 

(A) Automated meter reading loss reduction project and installation of 

meters at critical nodes to provide NEDCo with the ability to identify and monitor where 

technical and commercial losses are occurring. 

(B) Provision ofservice materials for new connections to facilitate 

timely and standardized connection of customers. 

(C) Provision of operations and maintenance materials to allow 

NEDCo to perform emergency and routine repairs and maintenance on distribution feeders, 

laterals, distribution transformers and services. 

(D) Provision of vehicles, tools, and equipment for operating staff to 

safely and adequately manage operating functions throughout NEDCo. 

(E) Construction and upgrade of customer service centers to support 

NEDCo operating functions such as meter reading, bill delivery, collections, receiving and 

addressing customer complaints, and maintenance activities, all managed through local customer 

service centers. 

(iv) Technical Loss Reduction Activity. 

The proposed investments under the Technical Loss Reduction Activity, similar to those for 

ECG described above in paragraph l(a)(iv) of Part B ofthis Annex I are: 

(A) Update distribution design and construction standards to reflect 

best practice. 

(B) Low voltage bifurcation and network improvements to reduce the 

length ofthe low voltage circuits to ensure they do not exceed a length that affects the quality of 

service and a technical loss threshold. 

(C) Introduction ofreactive power compensation for primary 

substations to optimize power levels at 34.5/11 kV substations. 

(D) Rehabilitation/upgrade oflines and underground cables to replace 

aging medium voltage underground conductors subject to frequent faults that are causing 

outages. 

(E) Conversion of shield wire scheme to convert the single-phase 

shield wire distribution service to three phase 34.5 kV distribution on wood or steel poles and 

energize communities in the NEDCo Target Regions. 

ANNEXl-12 
(F) Installation of primary substations with interconnecting subtransmission links and medium voltage offloading circuits conforming to NEDCo's standard 


substation design. 


(v) Outage Reduction Activity. 

The proposed investments under the Outage Reduction Activity, although on a more limited 

scale than those described above in paragraph l(a)(v) ofPart B ofthis Annex I for ECG, include: 

(A) Installation of an outage management system to identify outage 


locations and causes and serve to reduce outage frequencies and durations. 


(B) Sectionalization study ofNEDCo Target Regions for the purpose 

oflocating sectionalizing devices in the medium voltage network and implementing the 

recommendations in a pilot area to reduce the geographic area affected by outages when they do 

occur. 

(b) 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. The beneficiary 

analysis will be updated in conjunction with the computation of economic rates ofreturn under 

the studies referenced in paragraph 2(a)(ii)(l) of Part B ofthis Annex I. 

(c) Environmental and Social Performance. 

According to MCC Environmental Guidelines, the NEDCo Financial and Operational 

Turnaround Project is likely to be considered a "Category B" project. The most likely 

environmental and social risks arising from the NEDCo distribution turnaround Project are the 

same as those identified for the ECG Project and, as such, the same mitigation measures and 

documentation requirements described in paragraph l(c) of Part B ofthis Annex I apply. 

(d) Social and Gender Integration. 

The social and gender issues and challenges that women in utility companies experience also 

exist at NEDCo. The interventions under the Modernizing Utility Operations Activity are similar 

to those identified in the ECG Financial and Operational Turnaround Project described in 

paragraph 1 ( d) of Part B ofthis Annex I above. 

(e) Sustainability. 

For the most part, the approach to sustainability ofthe NEDCo Financial and Operational 

Turnaround Project is the same as that identified for the ECG Project described in paragraph 1 (g) 

of Part B ofthis Annex I. 

ANNEXl-13 
3. Regulatory Strengthening and Capacity Building Project. 

(a) Summary of Project and Activities. 

The Regulatory Strengthening and Capacity Building Project consists oftwo Activitiesca~acity ?uilding ofthe sector performance monitoring capabilities to ensure better reporting and 

tanff review, focused on the process ofratemaking and the structure oftariffs. 

(i) Sector Performance Monitoring Capacity Building Activity. 

The purpose ofthe Sector Performance Monitoring Capacity Building Activity is to provide 

capacity building for the Ministry ofEnergy and Petroleum ("MoEP'), National Development 

Planning Commission ("NDPC'), Public Utilities Regulatory Commission ("PURC'), and 

Energy Commission ("EC') staff to strengthen their capacity for performance monitoring and 

ensuring service quality. The Regulatory Strengthening and Capacity Building Project will focus 

on regulatory monitoring and independent verification by MoEP, PURC and the EC. 

This Activity will include the following interventions: 

(A) Capacity and needs assessments with regards to data quality, 

monitoring systems (data collection, analysis, reporting, quality control, and communications) on 

key performance metrics identified for the Compact and Partnership for Growth and listed in the 

Electricity Supply and Distribution (Technical and Operational) Rules (L.I. 1816, 2005). 

(B) Technical assistance in developing and implementing monitoring 

and reporting systems, including the development or improvement ofMIS systems for MoEP. 

(C) Support in strengthening the MoEP performance monitoring unit 

through a resident advisor in MoEP. 

(D) Provision and training for EC and PURC staff on equipment and 

processes for proper independent monitoring and verification. This will include support in 

benchmarking and developing more realistic performance targets for licensed and regulated 

entities, either government owned or privately owned. 

(E) Data quality audits and training in proper monitoring practices for 

sector stakeholders, including NDPC. 

(F) Support for the publication and analysis of performance data for 

the sector, including NDPC, in order to enhance transparency. 

(ii) Tariff Review and Regulation Activity. 

The proposed interventions under this Activity, designed to strengthen ratemaking and other 

regulatory processes, are: 

ANNEXl-14 
(A) Facilitating one or more partnership arrangements with qualified 

organizations comprised of state, national or international regulatory practitioners and technical 

experts. The partnership(s) will focus on regulatory strengthening (at the commissioner and key 

staff level) and enhancing the capacity of both PURC and the EC based on a skills gap analysis 

and needs assessment. Information sharing with regulators and experts through partnership 

activities will help identify best practices in regulation as well as areas for improvement within 

the PURC and EC regulatory structures. 

(B) Various studies to include an updated cost ofservice study (at the 

levels of generation, transmission, and distribution), cost of unserved energy study, system losses 

study, willingness/ability to pay study, cross subsidization/lifeline study, quality ofservice 

performance index study, multiple dwelling study, and street lighting levy review. The purpose 

ofthese studies is to support the development, approval and implementation ofthe Tariff Plan. 

These studies will specifically address regulatory, policy, and infrastructure support to facilitate 

consumers' ability to sell power back to the grid (embedded generation, net metering and feed-in 

tariffs). This Activity will also address the effectiveness of current dispute resolution 

mechanisms available for tariff decisions, tariff setting and related issues and, to the extent 

necessary, make recommendations to align with best practices. 

(b) Beneficiaries. 

The immediate beneficiaries ofthe Regulatory Strengthening and Capacity Building Project 

would be the institutions and staff receiving the technical assistance and capacity building but the 

ultimate beneficiaries, when the new skills are applied, will be the customers ofECG and 

NEDCo. 

(c) Environmental and Social Performance. 

According to the MCC Environmental Guidelines, the Regulatory Strengthening and Capacity 

Building Project is considered a "Category C" project as the proposed activities are unlikely to 

have adverse environmental and social impacts. 

(d) Sustainability. 

The objective behind the Regulatory Strengthening and Capacity Building Project is to impart 

knowledge and skills to the staff ofthe policy and regulatory agencies, and change behaviors and 

incentives in the sector. Mentoring under the partnerships is intended to reinforce that over time. 

The Regulatory Strengthening and Capacity Building Project is intended to support changes in 

the governance, management and policies ofthe sector in order to ensure the sustainability of all 

sector investments. 

4. Access Project. 

(a) Summary ofProject and Activities. 

The objective ofthe Access Project is to improve access to reliable electricity among Micro, 

Small and Medium Enterprises in selected Markets and Economic Enclaves in urban and periurban areas in the ECG and NEDCo Target Regions. The Access Project is expected to provide 

ANNEXI-15 
public lighting in Markets and Economic Enclaves, increase the number of new connections for 

MSMEs in targeted areas by reducing barriers to obtaining legal connections and strengthening 

partnerships among relevant institutions, thereby contributing to improved socially inclusive 

service delivery and increased productivity in Markets and Economic Enclaves. In addition, this 

Project will facilitate connections to social institutions (schools and health facilities) within the 

area of the Markets and Economic Enclaves. 

MiDA will identify which Markets and Economic Enclaves within the ECG Target Regions and 

the NEDCo Target Regions meet mutually agreed upon selection criteria for participation in the 

Access Project (the "Targeted Markets and Economic Enclaves"). In order to advance project 

development and detailed design of activities, MiDA will conduct a comprehensive survey ofthe 

Targeted Markets and Economic Enclaves. Based on the survey outcome and other planned 

studies, detailed project design will be completed. MiDA will explore and act upon opportunities 

to structure the project design and roll-out ofinterventions in ways that will enable an impact 

evaluation to test which interventions are most effective in expanding the ability ofMSMEs to 

obtain safe and legal connections to the grid. MiDA will explore opportunities, including 

partnering with other institutions, to promote innovative approaches and leverage additional 

resources to scale-up those interventions that prove successful and are cost-effective. 

(i) Improved Electricity Supply to MSMEs and Social Institutions Activity. 

The objective ofthis Activity is to improve the supply of electricity for MSMEs in Targeted 

Markets and Economic Enclaves and, to the extent possible, nearby social institutions. 

To inform the design ofthis Activity, a power audit will be conducted in the Targeted Markets 

and Economic Enclaves and nearby social institutions to provide information on the status of 

existing electricity infrastructure; wiring standards; and potential fire hazards and recommend 

upgrades and corrective interventions to ensure reliability in electricity supply and safety. 

Following the recommendations ofthe power audit, the interventions envisaged under this 

Activity are as follows: 

(A) 

and Economic Enclaves. 

Infrastructure upgrades and corrective actions in Targeted Markets 

(B) Provision ofmetered Public Lighting in Targeted Markets and 

Economic Enclaves and Targeted Social Institutions to extend business operating hours, prevent 

theft and increase public safety, in particular for women. 

(C) Electrification ofTargeted Social Institutions that currently lack 

service. 

The above interventions will be carried out in coordination with the Energy Efficiency and 

Demand Side Management Project. 

ANNEXl-16 
(ii) Improving Service Delivery and Strengthening Partnerships Activity. 

The objective ofthis Activity is to develop and implement technical and institutional approaches 

for broadening participation in the productive use of electricity that can be applied in the service 

areas ofECG and NEDCo. The interventions under this Activity are as follows: 

(A) Conduct studies to better understand the various challenges 

MSMEs in Targeted Markets and Economic Enclaves experience in accessing legal and reliable 

electricity. The studies will examine (1) standards and requirements for connection, (2) ECG and 

NEDCo's i1;1stitutional challenges in serving markets and economic enclaves, (3) customer 

perceptions of connection processes, ( 4) cost of connection, and (5) any other relevant barriers 

identified. Based on the outcome ofthese studies, design and implement solutions to address the 

various barriers MSMEs face in gaining legal and safe access to electricity. The implementation 

ofthe solutions will be scaled, organized and executed to allow robust impact evaluations where 

feasible. 

(B) Conduct a study on the challenges MSMEs in Targeted Markets 

and Economic Enclaves face in using electricity for productive purposes, as well as the programs 

and services that are currently available to address those challenges. Based on the findings ofthe 

study, implement information outreach campaigns and other selected potential interventions 

recommended by the study to create opportunities for MSMEs to benefit from relevant programs 

and resources. 

(C) Conduct an assessment ofrelevant institutions (market women 

associations, trade associations, MD As, ECG and NEDCo) to identify the challenges in the 

relationships between utilities and end users of electricity and recommend interventions to 

improve coordination and partnerships and thereby outreach to and awareness among the 

stakeholders. 

(D) Based on the outcome ofthe above assessment, design and 

implement interventions to (1) enhance the relevant institutions' capacity for coordination; and 

(2) strengthen partnerships for improving service delivery and promotion of safe practices of use 

of electricity. 

(b) Beneficiaries. 

Estimates for the number of beneficiaries will be established in more depth after the design 

phase. However, the Access Project will target Markets and Economic Enclaves within the ECG 

and NEDCo Target Regions. While specific sites have not yet been selected, direct beneficiaries 

ofthis intervention are MSMEs within the Markets and Economic Enclaves to be selected. 

Indirect beneficiaries will be social institutions such as schools and health clinics within the 

vicinity ofthe Markets and Economic Enclaves. 

(c) Environmental and Social Performance. 

According to MCC Environmental Guidelines, the Access Project is likely to be considered a 

"Category B" project, as minor environmental impacts may occur. Potential impacts are similar 

ANNEXl-17 
to those anticipated with the ECG and NEDCo Financial and Operational Turnaround Projects 

since the Access Project will entail replacing some smaller sections ofthe distribution network 

such as light posts. These will include potential resettlement, social costs of replacing illegal 

connections as well as health and safety considerations. The environmental, social and 

resettlement studies (FESIA, site specific ESIAs and/or ESMPs, RPF and RAP) for the ECG and 

NEDCo Financial and Operational Turnaround Projects will also cover any impacts associated 

with the Access Project. 

(d) Social and Gender Integration. 

The Social and Gender Assessment of2012 prepared by the Government and delivered to MCC 

identified the gap in electricity access between different income levels and highlighted 

preliminary issues with accessing electricity in Ghana. It also noted that women's income 

generating activities require high energy inputs while their access to modem energy for 

productive uses is limited. In accordance with MCC's Gender Policy, social and gender 

considerations have been taken into account in designing the Access Project. First, as most ofthe 

MSMEs in Markets are owned/operated by low-income women, increased lighting and access to 

electricity will open up opportunities to improve their income. Increased lighting will also 

contribute to a safe work environment. Second, through the partnership strengthening 

intervention, the capacity oftrade associations, including market women associations, will be 

enhanced, allowing them to voice their concerns and giving them the necessary tools to engage 

in dialogue with respective authorities and utility companies to work on solutions to their power 

problems with the ultimate goal of promoting socially inclusive and gender responsive electricity 

service delivery. 

(e) Sustainability. 

The sustainability ofthe Access Project stems from its emphasis on creating long-term solutions, 

including partnerships, outreach, and awareness building, that will improve safe, cost effective, 

and legal electricity service among enterprises in the targeted regions. This Project will provide 

enhanced and improved service to poor yet economically productive end users while also 

reducing costs associated with illegal connections and the resultant hazards. The Project design 

and evaluation strategy will set the stage for scale up of successful interventions in other parts of 

the country. Moreover, this Project will be implemented in collaboration with other development 

partners working on strengthening local government institutions to improve infrastructure service 

delivery. Implementation ofthe Access Project will build on the lessons learned from previous 

initiatives. 

(t) Policy, Legal and Regulatory Reforms. 

The Access Project has been developed in furtherance ofthe Government's policy objective to 

increase access to modem forms of energy. 

ANNEXl-18 
5. Power Generation Sector Improvement Project. 

(a) Summary of Project. 

The Power Generation Sector Improvement Project will support measures aimed at opening up 

the power sector and making it attractive to private investment in order to reach the 

Government's goals to have adequate installed generation capacity to meet demand. Ghana's 

power generation sub-sector and gas sector are undergoing transformation, as new indigenous 

gas supplies come on line and more independent power producer ("/PP") competition is 

encouraged. Activities under this Project address issues related to inadequate and unreliable gas 

supply, lack of a gas sector master plan and credible offtaker, uncoordinated capital expansion, 

as well as an unclear IPP framework. The Power Generation Sector Improvement Project is 

comprised of three Activities: 

(i) 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. Specific interventions to accomplish this 

objective include: 

(A) Embedded advisory support in the form of strategic advisors to 

lead the process of gas sector structuring and policy determination and serve as managers of 

short-term capacity building activities. 

(B) Capacity building to develop work products arising from the Gas 

Action Plan and Gas Sector Master Plan, each with attendant training to Ghanaian stakeholders. 

(ii) Facilitate Liquefied Natural Gas ("LNG") Development Activity. 

This Activity is intended to position the Government to secure LNG supply in the short to 

medium term to support the diversification of fuel for power generation. This Activity will 

provide technical assistance in the form of advisory support and capacity building to complement 

the technical engineering feasibility and design studies already funded under the 609(g) 

Agreement. The intent is to provide the Government with the appropriate financial and technical 

analyses required to attract funding from the private sector or other donors for LNG 

development. Specific interventions include: 

(A) LNG financial feasibility study to better understand the 

requirements for achieving Financial Close for an LNG project in Ghana. 

(B) LNG sourcing and pricing study to deepen and update the 

understanding of potential sources of LNG and forecast of prices over a long-term period. 

(C) Analysis of LNG transaction structures to develop options for 

Ghana. 

ANNEX I- 19 _J 
(iii) Strengthen Sector Planning and IPP Framework Activity. 

The objective of this Activity is to strengthen Ghana's power generation sector by providing a 

methodology to obtain new generation capacity at the lowest cost to meet the growing demand 

for electricity and expressed commitment to obtain future generation plants through private 

sector investment. Interventions under this Activity include: 

(A) Developing a least-cost integrated resource plan ("/RP"), installing 

an IRP system in Ghana, and providing associated capacity building for personnel in the energy 

sector. The IRP is a comprehensive plan for meeting forecasted annual peak energy demand 

(plus some established reserve margin) through a combination of supply-side and demand-side 

interventions over a specified period. This will allow the Government to conduct more effective 

strategic planning for the electricity grid and off grid systems and provide generation capacity 

from both traditional and renewable sources. The IRP will include a time-bound implementation 

plan which will make the plans for and the timing ofthe expansion of the power grid and 

additional generation capacity more transparent for stakeholders. 

(B) Developing a set ofstandard forms of contract for IPPs - such as 

agreements for power purchase, government support, escrow, and fuel supply. 

(C) Designing and providing core documents for IPP procurement 

processes (the "/PP Solicitation Plan"). The private sector promotion activities will cover both 

on-grid and off-grid options and will address the enabling environment for renewables. With 

respect to off-grid options, the Activity will examine market barriers to entry, recommend ways 

to strengthen opportunities for off-grid solutions, and design outreach approaches. 

(D) Providing strategic advisors to lead the process of sector planning, 

oversee the IRP development, and serve as transaction advisors on the first competitive IPP 

transaction(s), which will include renewable energy sources. 

(b) Beneficiaries. 

The Power Generation Sector Improvement Project will directly benefit end users and the 

Government. In the long run, with additional investment in generation at least cost, the whole 

economy benefits - by reducing power outages, enhancing the sustainability ofincreased thermal 

generation and increasing the potential throughput to beneficiary electricity consumers by 

enabling base load production from gas. The Power Generation Sector Improvement Project will 

reduce energy cost to enterprises, households and industry, improve general economic 

productivity and support the preservation and creation of employment opportunities in the 

economy. 

The Power Generation Sector Improvement Project will also benefit the following: (i) IPPsstable fuel supply (competitively priced gas), clearly defined process, and regulatory certainty 

will lead to lower generation costs per kWh with a more predictable return on investment; (ii) 

investors in gas exploration and production due to clear, rational and commercial arrangements 

in the sector; and (iii) developers ofrenewable energy projects by lowering barriers to entry, 

creating clear contracting processes and transparent pricing. 

ANNEXI-20 
(c) Environmental and Social Performance. 

According to MCC Environmental Guidelines, this Project is considered a "Category C" project. 

The proposed Activities under this Project are unlikely to have adverse environmental and social 

impacts. Most ofthe Activities are focused on reforms to attract private sector investment. This 

Project's emphasis on reform, coupled with MCC's requirements to improve overall 

environmental and social management ofthe Compact, creates an opportunity to enhance 

Ghana's environmental regulation during the life ofthe Compact and beyond. 

(d) Donor Coordination. 

MCC has been engaged with the active group of donors investing in the power sector in Ghana. 

The Compact was developed with frequent consultation and input from these partners: IFC, 

World Bank, Multilateral Investment Guarantee Agency; African Development Bank and the 

European Union/European Investment Bank. With respect to this Project, the World Bank is 

funding the preparation ofthe Gas Sector Master Plan. 

(e) USAID and USG. 

Ghana is a pilot country for Partnership for Growth and is also one ofthe first countries selected 

to participate in Power Africa. A table highlighting these partnerships follows: 

Partner 

USAID 

Power Africa 

USTDA 

US Dept. of 

Energy 

Sustainable 

Energy for All 

(SE4ALL) 

Sub-Sector 

Generation 

Generation 

Generation 

Generation 

Generation 

Involvement in Sector 

• Providing consultants to undertake due diligence and 

prioritization of23 licensed IPPs using least-cost criteria in 

consultation with World Bank and the Government 

• Providing technical assistance to the Ghana National Gas 

Company, developing the Gas Sector Action Plan, advising on 

commercial, financial and securitization issues 

• Providing potential transaction support for IPPs 

• LNG reverse trade mission in 2013 

• Potentially funding power park feasibility study 

• Supporting development ofEnergy Efficiency and Demand Side 

Management Project 

• Renewable Energy: double the share ofrenewable energy in the 

world's energy mix 

• Energy Efficiency: double the pace at which the world improves 

its energy efficiency. 

(t) Sustainability. 

There are three facets integral to the sustainability ofthe Power Generation Sector Improvement 

Project: creating an enabling environment that reduces barriers and levels the playing field for 

private sector investment; creating a sustained, market-based solution for diverse fuel supply 

chains; and building appropriate capacity within the planning/regulatory bodies. These will 

ANNEXl-21 
appr?pria_t~ly bal~nce the objectives inherent in a competitive but regulated market: stability and 

pred1ctab1hty for mvestors and reliability and cost effectiveness for consumers. 

The market-based and private sector enabling solutions are sustainable when delivered in 

combination with building appropriate regulatory capacity. Providing appropriate technical 

assistance while delivering useful and timely products and outputs to beneficiary agencies is best 

practice and leads to longer term success within these agencies. 

(g) Policy, Legal and Regulatory Reforms. 

The Power Generation Sector Improvement Project addresses a number of the Government's 

policy objectives for the energy sector, namely: securing long term fuel supplies for thermal 

power plants; supporting the modernization and expansion of energy infrastructure to meet 

growing demands and ensure reliability; and promoting and encouraging PSP in the energy 

sector. 

The Power Generation Sector Improvement Project is premised on the following reforms being 

implemented: (i) operationalization of a Gas Action Plan and Gas Sector Master Plan based on 

policy decisions to establish a sustainable market-oriented gas sector in Ghana so that gas can 

serve as the principal fuel source to meet Ghana's growing demand for electricity at least cost; 

(ii) creation of an enabling environment that facilitates the Government's objective of developing 

LNG as an alternative fuel source for power generation; and lastly (iii) strengthening the IPP 

framework to support further opening up ofthe generation market to private investors in the 

form ofIPPs and making the process for securing the right to develop such projects more open 

and transparent and conducted pursuant to a least cost plan. 

6. Energy Efficiency and Demand Side Management Project. 

(a) Summary of Project. 

The Constraints Analysis documents that in Ghana the demand for electricity is outstripping 

supply, which creates a gap in power availability and also undermines the reliability ofthe 

system. Energy efficiency and demand side management policies and investments represent a 

cost-effective means to bridge this gap, serving, in effect, as sources of supply. The Energy 

Efficiency and Demand Side Management Project is organized into four Activities, each 

described below. 

(i) Development and Enforcement of Standards and Labels Activity. 

Energy efficiency standards and labelling will be developed to provide information on the energy 

efficiency performance of selected energy consuming appliances and products available on the 

market to help remove low-quality energy wasting products from sale and consumer households. 

In addition, the standards and labelling that do exist could benefit greatly from technical updates 

and enforcement support. Informative labels will help consumers to make informed decisions 

about purchasing higher quality products that may have a higher cost up front, but have a lower 

impact on household utility bills and thereby save money in the long run. 

ANNEXl-22 
(ii) Improved Energy Auditing Activity. 

Capacity building and training support for energy auditing will be provided to energy 

management professionals to ensure that a core ofqualified and certified professionals are 

available in the Ghanaian market who can assist industrial and commercial customers in 

implementing cost effective energy savings measures. The capacity building will be 

complemented by investments in training centers and mobile test labs. This Activity also 

includes demonstration audits to stimulate the market and strengthen energy service companies 

that will effectively promote energy efficiency retrofits in industrial, institutional, and 

Government facilities. 

(iii) Education and Public Information Activity. 

Informed consumers allow markets to function more efficiently and effectively. Public education 

and information activities help ensure that consumers are fully informed regarding the benefit 

and trade-offs ofhigher efficiency appliances and equipment. This Activity potentially includes 

direct public education interventions targeting high energy peak load consumers and developing 

an energy efficiency component to integrate into the current school curriculum. Initial pilot tests 

and evaluation activities will allow testing of key assumptions regarding the role ofinformation 

in energy efficiency adoption for the Ghanaian market. 

(iv) Demand Side Management Infrastructure Activity. 

This Activity will support the following interventions: 

(A) Pilot tests and demonstrations ofdistributed applications (photovoltaic back-up power, solar powered street lighting) focused on Government electricity 

customers to reduce electricity consumption in Government facilities. 

(B) Conversion of conventional street lights in ECG Target Regions to 

LED street lighting. 

(b) Beneficiaries. 

Reducing energy waste will benefit all electricity consume~s in Gh~a, as i~ ~ll mak~ ~?re . 

electricity available at a cost far below that ofnew generation capacity. Ind1v1dual activities will 

target retail consumers, industry, and Government agencies: 

(i) The Development and Enforcement of Standards and Labels Activity will 

impact all consumers who use household and other appliances as its implementation occurs at the 

national level; 

(ii) The Improved Energy Auditing Activity is _geared ~oward_ i~du~trial and 

commercial customers, but Government agencies may also show mterest m part1c1patmg; 

(iii) The Education and Public Information Activity is meant to reac~ the . 

general public. Target beneficiaries include high energy peak consumers, students and mdustnal 

and commercial actors; 

ANNEXI-23 
. . (iv) The Demand Side Management Infrastructure Activity will impact a 


con:bmat~on of the general public (through LED street lighting) and Government agencies 


(which will be the focus ofsolar PV demonstrations). 


(c) Environmental and Social Performance. 

According to MCC Environmental Guidelines, the Energy Efficiency and Demand Side 

Management Project is considered to be a "Category B" project as the Activities under this 

Project are unlikely to pose any significant environmental, health or safety hazards that could not 

be mitigated. The Demand Side Management Infrastructure Activity could potentially include 

minor construction or rehabilitation works that will require site specific ESIAs and/or ESMPs to 

be prepared. Associated risks would include worker health and safety. 

(d) Sustainability. 

The Energy Efficiency and Demand Side Management Project will promote the sustainability of 

the energy sector by making better use of available energy, reducing growth in demand and the 

need for new generation investment. This will improve the financial viability of utilities, both by 

reducing investment cost and increasing the ability of consumers to pay their bills. 

This Project will also impact public behavior change in energy efficiency. It will catalyze 

changes in the market, allowing consumers to make informed decisions regarding the energy 

costs associated with their purchases. It also builds upon the demonstrated strength of Ghanaian 

institutions, which are leaders in energy efficiency. 

(e) Policy, Legal and Regulatory Reforms. 

The Energy Efficiency and Demand Side Management has been designed to further the policy 

objective of encouraging efficient and effective use of energy supply. 

C. IMPLEMENTATION FRAMEWORK 

1. Accountable Entity. 

(a) Structure and Establishment. 

The Government established an accountable entity, MiDA, in 2006 as a Ghanaian government 

corporation with independent authority under the laws of Ghana. MiDA will act as the 

Government's permitted designee under this Compact. 

MiDA will have operational and legal independence, including, inter alia, the ability to (i) enter 

into contracts in its own name; (ii) sue and be sued; (iii) establish a bank account in its own 

name; (iv) expend MCC Funding; and (v) engage contractors, consultants and/or grantees, 

including, without limitation, a procurement and fiscal agent. 

MiDA's internal operations are governed by a charter, which was required as part ofthe 

governmental decree establishing MiDA and by bylaws, which provide further detail on the 

internal operations ofMiDA. 

ANNEXl-24 
MiDA is ~dministered,,~anag~d, ~d supported by the following bodies: (i) an independent 

board ofdirectors (the Board'); (u) a management team (the "Management Team")· and (iii) 

one or more Stakeholders Committees (as defined below). ' 

(b) Board of Directors. 

The Board will have ultimate responsibility for the oversight, direction, and decisions ofMiDA, 

as well as the overall implementation of the Compact. It is comprised ofnine (9) voting 

members, plus three (3) non-voting observers identified below. The Board includes the following 

representatives I offices: 

(i) Chairman ofthe Board ofMiDA, as appointed by the President of Ghana; 

(ii) The Minister or any other government official ofthe rank of director or 

higher from the Ministry ofEnergy and Petroleum, initially to be the Minister ofEnergy and 

Petroleum ofGhana; 

(iii) The Minister or any other government official ofthe rank of director or 

higher from the Ministry of Finance, initially to be the Minister of Finance; 

(iv) The Minister or any other government official ofthe rank of director or 

higher from the Ministry ofTrade and Industry; 

(v) The Minister or any other government official ofthe rank of director or 

higher from the Ministry with oversight responsibility for MiDA; 

(vi) the Chief Executive Officer ofMiDA; 

(vii) one representative, selected by the Private Enterprise Foundation; 

(viii) one representative, selected by the Association of Ghana Industries; and 

(ix) one representative, selected by the Ghana Association ofPrivate 

Voluntary Organizations in Development. 

In addition, an MCC representative, the Chairman ofthe Board ofECG and the Chairman ofthe 

Board ofNEDCo will serve as non-voting members ofthe Board. The private sector and civil 

society representatives will be chosen by a transparent selection process approved by MCC. 

(c) Management Team. 

The Management Team reports to the Board and has principal responsibility for the day-to-day 

operations management ofthe Compact, including contracting, program management, financial 

management, reporting, and monitoring and evaluation. The Management Team is led by a Chief 

Executive Officer and as ofthe date of Compact signature is composed ofthe following officers 

and directors: 

ANNEXI-25 
(i) Chief Executive Officer' 

(ii) Chief Operating Officer; 

(iii) Chief Financial Officer; 

(iv) General Counsel 

(v) Procurement Director; 

(vi) Monitoring and Evaluation and Economics Director; 

(vii) Distribution Projects Director; 

(viii) Generation Projects Director; 

(ix) Reform Unit Director; 

(x) Environmental and Social Performance Director; 

(xi) Social and Gender Assessment Director; 

(xii) Communications Director; and 

(xiii) Internal Auditor. 

(d) Reform Unit. 

Given the importance ofthe reform program requiring support from the highest levels of 

Government, a Reform Unit will be created within MiDA that reports directly to the Board 

through the CEO. The Reform Unit will be responsible for taking action as needed on key 

reforms, working closely with MiDA in coordinating studies and consultants, developing a 

strategy to implement the proposed reform program, and establishing a review process to 

regularly evaluate progress on key items in the reform agenda. 

(e) Stakeholders' Committee(s). 

MiDA will be assisted by one or more stakeholders' committees, the composition ofwhich is 

currently under discussion with the Government (the "Stakeholders' Committee"). The 

Stakeholders' Committee(s) will be responsible for continuing the consultative process · 

throughout implementation ofthe Compact. While the Stakeholders' Committee(s) will not have 

any decision-making authority, the Stakeholders' Committee(s) will be responsible for 

reviewing, at the request ofthe Board or the Management Team, certain reports, agreements, and 

documents related to the implementation ofthe Compact in order to provide advice and input to 

MiDA regarding the implementation ofthe Program. The Stakeholders' Committee(s) may be 

composed of, inter alia, program beneficiaries, regional and local government representatives, 

ANNEXl-26 
entities with an interest or involvement in the implementation of the Compact, key NGOs, and 

any applicable civil society and private sector representatives. 

2. Implementing Entities. 

Subject to the terms and conditions ofthis Compact, the Program Implementation Agreement 

and any other related agreement entered into in connection with this Compact, as noted above the 

Government intends to engage several entities ofthe Government to implement and carry out 

specified Activities (or a component thereof) under this Compact (each, an "Implementing 

Entity"). The appointment of any Implementing Entity will be subject to review and approval by 

MCC. The Government will ensure that the roles and responsibilities of each Implementing 

Entity and other appropriate terms are set forth in an agreement, in form and substance 

satisfactory to MCC (each an "Implementing Entity Agreement'). 

3. Fiscal Agent. 

Unless MCC agrees otherwise in writing, the Government will engage a fiscal agent (a "Fiscal 

Agenf') which will be responsible for assisting the Government with its fiscal management and 

assuring appropriate fiscal accountability ofMCC Funding, and whose duties will include those 

set forth in the Program Implementation Agreement and such agreement as the Government 

enters into with the Fiscal Agent, which agreement will be in form and substance satisfactory to 

MCC. 

4. Procurement Agent. 

Unless MCC agrees otherwise in writing, the Government will engage a procurement agent (a 

"ProcurementAgenf') which will be responsible for assisting the Government with procurement 

ofgoods, works and services using Compact Funding pursuant to procurement standards set 

forth in the MCC Program Procurement Guidelines, and whose duties will include those set forth 

in the Program Implementation Agreement and such agreement as the Government enters into 

with the Procurement Agent, which agreement will be in form and substance satisfactory to 

MCC. 

ANNEXI-27 

ANNEX II 

MULTI-YEAR FINANCIAL PLAN SUMMARY 

This Annex II summarizes the Multi-Year Financial Plan for the Program. 

1. General. 

A multi-year financial plan summary ("Multi-Year Financial Plan Summary") is attached 

hereto as Exhibit A to this Annex II. By such time as specified in the Program Implementation 

Agreement, the Government will adopt, subject to MCC approval, a multi-year financial plan 

that includes, in addition to the multi-year summary of estimated MCC Funding and the 

Government's contribution offunds and resources, the annual and quarterly funding 

requirements for the Program (including administrative costs) and for each Project, projected 

both on a commitment and cash requirement basis. 

2. Government Contribution. 

During the Compact Term, the Government will make contributions, relative to its national 

budget and taking into account prevailing economic conditions, as are necessary to carry out the 

Government's responsibilities under Section 2.6(a) ofthis Compact. These contributions may 

include in-kind and financial contributions (including obligations ofGhana on any debt incurred 

toward meeting these contribution obligations). In connection with this obligation the 

Government has developed a budget over the Compact Term to complement MCC Funding 

through budget allocations to the ECG and NEDCo Financial and Operational Turnaround 

Projects. The Government initially anticipates making contributions of approximately 

US$23,115,000 (or 7.5 percent ofthe amount of Compact Implementation Funding and 

Tranche I Funding provided under this Compact) over the Compact Term. Upon satisfaction of 

the conditions precedent to the initial Tranche II Funding Disbursement, the Government 

anticipates making additional contributions of approximately US$14,250,000 (or 7 .5 percent of 

the amount ofTranche II Funding provided under this Compact). Such contribution will be in 

addition to the Government's spending allocated toward such Project Objectives in its budget for 

the year immediately preceding the establishment ofthis Compact. The Government's 

contribution will be subject to any legal requirements in Ghana for the budgeting and 

appropriation ofsuch contribution, including approval ofthe Government's annual budget by its 

legislature. The Parties may set forth in the Program Implementation Agreement or other 

appropriate Supplemental Agreements certain requirements regarding this Government 

contribution, which requirements may be conditions precedent to the Disbursement ofMCC 

Funding. During implementation ofthe Program, the Government's contributions may be 

modified or new contributions added with MCC approval, provided that the modified or new 

contributions continue to advance the Project Objectives. 
EXHIBIT A 


MULTI-YEAR FINANCIAL PLAN SUMMARY 


(US$) 


Compact Program Tranche I CIF year l 

I.I Private Sector Participation 2,125,000 875,000 

l .2 Modernizing ECG Operations 5,4 75,800 6,051,200 

l.3 Commercial Loss Reduction 4,517,400 

l.4 Technical Loss Reduction 6,470,500 

l.5 Outage Reduction 

Subtotal 7,600,800 17,914,100 

2.l Private Sector Participation l,125,000 375,000 

2.2 Modernizing NEDCo Operations 2,404,000 

2.3 Commercial Loss Reduction 

2.4 Technical Loss Reduction 

2.5 Outage Reduction 

Subtotal 

3.l Sector Performance Monitoring Capacity 

Building 

3.2 Tariff Review & Regulation 

Subtotal 

5. l Operationalize "Gas to Power" Plan 

5.2 Facilitate LNG Development 

5.3 Strengthen IPP Framework 

Subtotal 

6.l Development and Enforcement ofStandards 

6.2 Improve Energy Auditing 

6.3 Education and Public Information 

6.4 Demand Side Management Infrastructure 

Subtotal 

}·i~'it!iii.P'.~~M~~"(OC~¥>f;:' 

7. l Monitoring and Evaluation 

Subtotal 

.~~:1~a~t~l~~ri1gjlt · 8.1 MiDA Administration 

8.2 Fiscal Agent/Procurement Agent/Advisors 

8.3 Audit & Compliance 

3,529,000 375,000 

250,000 

3,000,000 

4,022,000 3,972,300 

414,800 

832,800 483,300 

4,854,800 4,870,400 

1,400,000 

350,000 

550,000 

450,000 

2,750,000 

4,581,200 4,100,250 

2,800,000 2,700,000 

74,200 275,000 

Year2 

4,748,000 

14,526,950 

12,876,900 

2,854,150 

35,006,000 

500,000 

2,601,500 

514,000 

384,950 

123,300 

4,123,750 

384,000 

3,801,000 

4,185,000 

2,150,000 

950,000 

750,000 

2,350,000 

6,200,000 

3,576,250 

2,000,000 

300,000 

ANNEXII-2 

Year3 

1,967,500 1,100,000 

16,043,950 14,378,500 

18,149,850 19,791,200 

5,061,700 2,801,700 

41,223,000 

2,200,000 2,600,000 

6,010,300 5,885,150 

l,389,700 5,070,900 

4,013,000 5,350,800 

304,350 304,300 

19,211,150 

425,300 

l,781,200 217,600 

2,206,500 217,600 

l,950,000 650,000 

l,200,000 600,000 

600,000 500,000 

3,250,000 3,150,000 

7,000,000 4,900,000 

3,980,900 3,758,850 

2,000,000 2,000,000 

400,000 400,000 

6,380,900 6,158,850 

Total 

3,000,000 

990,000 20,332,500 

2,632,800 52,099,600 

6,123,650 63,412,100 

10,717,550 

3,200,000 10,000,000 

l,127,550 18,028,500 

4,570,600 11,545,200 

4,013,100 13,761,850 

124,150 856,100 

13,035,400 54,191,650 

7,994,300 

l,224,100 

7,115,900 

16,334,300 

450,000 6,600,000 

200,000 3,300,000 

400,000 2,800,000 

3,500,000 12,700,000 

4,550,000 25,400,000 

4,634,850 24,632,300 

2,000,000 13,500,000 

550,800 2,000,000 

7,185,650 40,132,300 

~I-~f 
(US$) 

Compact Program Tranche H CIF Year 1 Year 2 Year3 Year4 Years Total 

9. ECG Financial and Operational Turnaround Project ­ Tranche II 

9. I Private Sector Participation - - - - - - -

9.2 Modernizing ECG Operations - - - 4,314,430 5,656,033 810,437 10,780,900 

9.3 Commercial Loss Reduction - - - 10,972,655 16,800,397 19,650,448 47,423,500 

9.4 Technical Loss Reduction - - - 22,913,191 48,828,010 52,389,799 124,131,000 

9.5 Outage Reduction - - - 1,907,085 3,849,640 1,907,875 7,664,600 

Total Compact Funds ­ Tranche If - - - 40,107,361 75,134,080 74,758,559 190,000,000 

Total Compact Funds 28,900,000 36,419,750 60,116,000 115,415,111 l 46, 163,080 111,186,059 498,200,000 

Gove_rnmcnt Contribution ­ Tranche I 7,705,000 7,705,000 7,705,000 - - - 23, Il5,000 

Government Contribution ­ Tranche II - - - 7,125,000 7,125,000 - 14,250,000 

Total Government Contribution 7,705,000 7,705,000 7,705,000 7,125,000 7,125,000 - 37,365,000 

TOTAL COMPACT+ .. ·. .· •.

.. ; " ,' {;::.~ ,,': 0 ' 

GOVERNMENT CONTRIBUTION 36,605,000 44,124,750 61,s2i,ooo. l2Z;54~lll; 153,288,080 111,186,059 535,565,000 

ANNEX II-3 

ANNEX III 

DESCRIPTION OF THE MONITORING AND EVALUATION PLAN 

This Annex III summarizes the monitoring and evaluation plan for this Compact ("M&E Plan"). 

The actual structure and content ofthe M&E Plan, which may differ from those specified in this 

Annex III, will be agreed to by MCC and the Government in accordance with MCC's Policyfor 

Monitoring and Evaluation ofCompacts and Threshold Programs (the "MCC M&E Policy"). In 

addition, the M&E Plan may be modified from time to time as described in the MCC M&E 

Policy without requiring an amendment to this Annex III. The M&E Plan will be posted publicly 

on the MCC Website and updated as necessary. 

1. Objective. 

MCC and the Government will formulate and agree to, and the Government will implement or 

cause to be implemented, an M&E Plan that explains in detail how and what MCC and MiDA 

will (a) monitor to determine whether the Projects are on track to achieve their intended results 

("Monitoring Componenf'), and (b) evaluate implementation strategies, provide lessons learned, 

determine cost effectiveness and estimate the impact of Compact interventions ("Evaluation 

Component"). The M&E Plan will summarize all indicators that must be reported to MCC on a 

regular basis, as well as a description of any complementary data to be collected for evaluation 

ofthe Program. The M&E Plan will also include any monitoring and evaluation ("M&E') 

requirements that MiDA must meet in order to receive Disbursements, and will serve as a 

communication tool so that MiDA staff and other stakeholders clearly understand the objectives 

and targets that MiDA is responsible for achieving. The results ofM&E activities, measured by 

monitoring data and evaluations, will be made publicly available on the website of MiDA and on 

the MCC Website. 

2. Program Logic. 

The M&E Plan will summarize the clearly defined Compact-level logic model which illustrates 

how the Compact Program, Projects and Activities contribute to the Compact Goal, the Program 

Objectives, and Project Objectives. 

This overall program logic illustrated on the next page will be complemented by lower level 

logic models at the Project, and/or Activity levels (as necessary) depending on Compact design 

and implementation. All logic models will clearly summarize the outputs, outcomes, and goal 

expected to result from the Program. A description ofthe objectives underlying the Program and 

each Project is included below: 

The Program Objectives are to: (i) increase private sector investment and the productivity and 

profitability of micro, small, medium and large scale businesses; (ii) increase employment 

opportunities for men and women; and (iii) raise earning potential from self-employment and 

improved social outcomes for men and women. 
r~-~~~-~-~,.------~~~-~~~ -~~· ·-- -­ -~~~~---~-~--~---~-~~-~- ~~-~~·---~--~--~~--~---~

Overall Program Logic ,1 

[ GOAL: Poverty reduction through private sector led economic growth 

Increased private s~ctor· investment and 

· 

pro<luctivi 

----.

ty ~1id 

-----

profitability of 

··Program 

n~ictv, SfT1all, 

Objectives 

nicdium and 1-:?r"':;!i' sea\(' busir.('s,.es; lncrcas£?d 

. 

employment opportuni!H'S for 

~ 

men and 

women;Higi1er edrning pC>tenti.'ll from self- employ:n~1H <i:nd in1r11ov€'<l social 01..1tcom~ for men and wom~n. 

----- . . -=:::1___ 

Generation SectorOutcomes Djstributjon & Access Sector Outcomes 

Increased availability, reliability and expansion of cost-effective educed "hidden costs" and mcreased (re)investmentandexpansion in 

generation ~ power sector. 

Each Project Objective is listed below. 

The ECG Financial and Operational Turnaround Project's objective is to improve the quality 

and reliability of electricity through reduced outages and cost-effective service delivery by ECG, 

reduce aggregate technical, commercial and collections losses, and to ensure ECG can serve as a 

creditworthy and credible offtaker under power purchase agreements. The Project Objective will 

be achieved by reducing implicit subsidies (created by losses, underpricing and under-billing) 

and ensuring cost-recovery and re-investment in the distribution sub-sector, through introduction 

of PSP in the governance and management ofECG, and through infrastructure and foundational 

investments designed to reduce losses and improve service quality; 

The NEDCo Financial and Operational Turnaround Project's objective is to develop NEDCo 

into a utility that will contribute to economic growth in the northern part of Ghana by improving I its ability to recover costs and provide service to customers in a timely and effective manner. The 1, Project Objective will be achieved by strengthening NEDCo's financial and operational 

performance and ensuring it is able to function independently, and to engage with the private 

sector to meet their electricity needs. In addition, this Project will introduce PSP to provide 

operational and commercial capacity building to ensure the achievement of performance targets, 

I and will provide infrastructure and foundational investments designed to reduce losses and 

improve service quality; 

L ANNEX lfI - 2

I 

____ 
The Regulatory Strengthening and Capacity Building Project's objective is to ensure the 

sustainability of all power sector investments, promote greater transparency and accountability 

for results in the sector, and enhance evidence-based decision making among sector institutions. 

This Project will therefore ensure that the power sector is financially self-sustaining and relies 

less heavily on cross-subsidies among tariff categories or other direct or implicit subsidies from 

the Government. This Project will support creation of an enabling environment for private 

investment in the power sector. The Project Objective will be achieved by strengthening 

independent monitoring of service quality, and improving capacity for ratemaking and other 

regulatory processes, including the review and restructuring oftariffs to enable the utilities to 

recover costs; 

The objective ofthe Access Project is to improve access 1 to reliable electricity among MSMEs in 

markets and economic enclaves in urban and peri-urban areas coinciding with those regions 

targeted by the commercial and technical loss reduction investments ofthe ECG and NEDCo 

Financial and Operational Turnaround Projects. The Access Project is expected to increase the 

number ofnew connections in 'targeted areas by reducing barriers to obtaining legal connections, 

thereby contributing to increased productivity in markets and economic enclaves. This Project 

will also contribute to the overall objective ofthe distribution turnaround projects ofreducing 

commercial losses and improving the financial health ofthe distribution companies, by 

decreasing the number of consumers who would otherwise seek illegal connections to the 

network; 

The objective ofthe Power Generation Sector Improvement Project is to reduce disruptions in 

electricity service due to generation shortfalls by promoting timely investments in additional 

installed generation capacity, through the creation of an improved enabling environment for 

private sector investment in conventional and renewable generation. This Project aims to ensure 

a more cost-effective fuel mix by instituting a framework for a reliable fuel supply for thermal 

generation. In addition, this Project will facilitate the adoption of a least-cost expansion plan 

leading to increased potential throughput to electricity consumers and reduced energy costs to 

enterprises, households and industry. This Project will achieve these results by establishing a 

competitive tendering process for IPPs, by helping to finalize commercial gas supply agreements 

to facilitate development of gas reserves and LNG for power generation, and by securitizing the 

gas sector to enable reduced reliance on more costly oil-based fuels; 

The objective ofthe Energy Efficiency and Demand Side Management Project is to reduce 

energy waste by consumers, thereby increasing the reserve margin between electricity supply 

and peak demand, making electricity available to more consumers at a lower cost than that of 

developing new generation capacity. In addition, this Project will improve the financial viability 

ofECG and NED Co by helping Ghanaian government agencies, which comprise a significant 

portion oftotal energy demand, to reduce their energy consumption. This Project will achieve 

these results through the development and enforcement of standards and labels, improving 

energy audits, providing education and public information, and investment in demand side 

management infrastructure. 

1 Access to electricity will be assessed along several dimensions including (l) capacity, (2) duration/availability, (3) 

reliability, (4) quality, (5) affordability, (6) legality, (7) convenience, and (8) health and safety. 

ANNEX IIl-3 
(a) Projected Economic Benefits and Beneficiaries. 

The ERR analysis calculates average economic opportunity costs of electricity disruptions by 

estimating losses in value added due to the costs of own generation of electricity and losses of 

value added due to the temporary cessation of economic activity. The midpoint ERRs for each 

project are presented in the table below. 

Project 

ECG Financial and Operational Turnaround Project 

NEDCo Financial and Operational Turnaround Project 

Regulatory Strengthening and Capacity Building Project (costs 

incorporated in ECG/NEDCo calculations) 

Access Project 

Power Generation Sector Improvement Project 

Energy Efficiency and Demand Side Management Project 

Estimated ERR 

19% 

TBD 

Not Applicable 

(wrapped into the ECG 

and NEDCo ERRs) 

Not Applicable 

24%2 

27% 

The M&E Plan will also define in detail the persons or entities expected to benefit from the 

Program. Beneficiary analysis is an extension of economic rate of return analysis that seeks to 

disaggregate the total increase in income to determine specifically which segments of society 

will benefit from the Compact Projects and Activities. MCC considers beneficiaries3 of Projects 

and Activities to be those people who experience better standards ofliving as a result ofthe 

Project or Activity (as the case may be) through higher real incomes. The expected beneficiaries 

ofthis Compact are shown in Annex I, and the estimates ofthe number of beneficiaries may be 

updated in the final M&E Plan as additional information becomes available. 

The M&E Plan will also outline key assumptions and risks that underlie the accomplishment of 

the theory of change summarized in the program logic. 

3. Monitoring Component. 

As defined in the MCC M&E Policy, monitoring is the continuous, systematic collection of data 

on specified indicators to provide indications ofprogress toward objectives and the achievement 

ofintermediate results along the way. To monitor progress toward the achievement ofresults of 

this Compact, the Monitoring Component ofthe M&E Plan will identify (i) the Indicators (as 

defined below), (ii) the definitions ofthe Indicators, (iii) the sources and methods for data 

collection, (iv) the frequency for data collection, (v) the party or parties responsible for collecting 

and analyzing relevant data, and (vi) the timeline for reporting on each Indicator to MCC. It 

should be noted that some indicators will continue to be tracked after the Compact Term as 

necessary. 

(a) Goal, Outcome, Output, and Process Indicators. 

2 Refers to full elimination of a deficient reserve margin. 
 3 As used in this Compact, the term "beneficiary" has the meaning described in MCC's Guidelines for Economic 


and Beneficiary Analysis. 

ANNEXIIl-4 
The M&E Plan will measure the results ofthe Program using quantitative, objective, and reliable 

data ("Indicators"). These may be augmented by qualitative data whenever necessary. 

(i) The M&E Plan will establish baselines for every Indicator (each a, 

"Baseline"). An Indicator's Baseline should be established prior to the start ofthe corresponding 

Project and/or Activity. Baselines demonstrate that the problem can be specified in measurable 

terms, and are thus a pre-requisite for adequate intervention design. The Government will collect 

Baselines on the selected Indicators or verify already collected Baselines where applicable. 

(ii) The M&E Plan will establish a benchmark for each Indicator that specifies 

the expected value and the expected time by which the result will be achieved ("Target"). 

(iii) The M&E Plan will indicate which Indicators will be disaggregated by 

gender, income level, and age, and beneficiary types to the extent practical and applicable. 

(iv) MCC's Common Indicators (as described in the MCC M&E Policy) will 

also be included as relevant. 

(v) Subject to prior written approval from MCC and in accordance with the 

MCC M&E Policy, the Government may add Indicators or refine the definitions and Targets of 

existing Indicators. 

(vi) MiDA must report to MCC on monitoring Indicators in the M&E Plan on 

a quarterly basis using an Indicator Tracking Table ("ITT') in the form provided by MCC. No 

changes to Indicators, Baselines or Targets may be made in the ITT until the changes have been 

approved in the M&E Plan. Additional guidance on Indicator reporting is contained in MCC 's 

Guidance on Quarterly MCA Disbursement Request and Reporting Package. In the case that 

MiDA submits a six-month disbursement request, the ITT must still be submitted quarterly. 

(b) Indicators, Baseline and Year 5 Targets. 

Key Indicators that can be reported on at least an annual basis will be included in quarterly 

monitoring indicator reports. The M&E Plan will contain the Indicators listed in the following 

tables, which are intended to align with and contribute to monitoring indicators defined in Power 

Africa and the Partnership for Growth M&E Addendum. 

It should be noted that the indicators listed below are not exhaustive of all indicators that will be 

collected for this Compact. Instead, they represent data that has been deemed, at this stage, 

important to collect. Additional outcome indicators as well as all output and process indicators 

will be developed for each project as design and implementation details are further defined. 

Table 1.1: Overall Program Objectives 

The M&E program will track progress towards intermediate economic outcomes reliant on or 

impacted by electricity; however, outside ofthe context of a rigorous impact evaluation, the 

Compact will not try to make statements of attribution between specific Compact interventions 

and changes in objective-level outcomes. The economic analysis ofthe Projects recognizes that 

the Compact's investment itself will not be sufficient to achieve significant improvements in 

nation-wide electricity reliability and access within the time frame ofthe Compact. The costs of 

complementary investments such as gas infrastructure facilities and the development of a power 

ANNEXIII-5 

park have been considered lo construct the total investment program that the MCC investment is -1 

expected to catalyze. The economic analysis therefore attempts to assess the viability ofthis 

larger venture that MCC financing contributes to. 

Statement '','' 

: ~"'"- ' TaF~t Source 

Firms citing Percentage of firms Reduction WB 

electricity as a identifying energy as % 86.2 Enterprise 

major obstacle to (2007) 4 over Survey or 

doing business a major constraint baseline PFG Survey 

Average value of WB 

Sales losses due sales losses due to Reduction Enterprise Reduced cost electricity outages as % 6 (2007) over 

of doing to power outages a percentage of baseline Survey or 

business revenue 

PFG Survey 

Average annual kWh 

Diesel fuel of diesel generation Reduction WB 

consumption by consumed by % 29.5 Enterprise 

registered firms as a (2007) over Survey or firms 

percentage of total baseline PFG Survey 

electricity consumed 

Sum of durations of 

System Average all customer GRIDCO 

Improved Interruption interruptions divided Hours 274.4 TBD5 Daily 

Duration Index by Total customers in (2012) Report and reliability of (SAIDI) ECG system (ECG ECG electricity Global) system System Average Number of customer GRIDCO 

Interruption interruptions divided Number 74.45 TBD6 Daily 

Frequency Index by Total customers in (2012) Report and 

(SAIFI) system (ECG Global) ECG 

Number of customers Number 2.2 Increase 

Increased Customers connected to the (ECG) million over ECG 

access to national network (2012)7 baseline 

reliable Number of customers Number 447,000 Increase 

electricity Customers connected to the (NEDCo) (2012) over NEDCo 

national network baseline 

4 The World Bank plans to publish a more current data on this indicator from its Enterprise Survey by Summer 

2014; see http://www.enterprisesurveys.org/Me!hodology/Current-Projects 5 5-year target to be set prior to entry into force. 6 5-year target to be set prior to entry into force. 7 IFC/AF Mercados report notes 2,211, 195 million for ECG in 2012, and 447,407 for NEDCo in 2012. 

ANNEX TII-6 
Table 1.2: ECG Financial and Operational Turnaround Project 

The following are Indicators and Targets for the monitoring ofthe ECG Financial and 

Operational Turnaround Project as further described in paragraph 1 of Part B of Annex I. Key 

Targets and Baselines for these Indicators will be defined prior to completion ofthe M&E Plan. 

Outcomes 


Capital 
 Total value of new 

expenditure equipment installed in the US$ TBD TBD9 ECG 

(Capex)8 distribution network 

Reinvestment Ratio of 

and actual 

maintenance maintenance Actual maintenance in capital expenditures 0.98 10 

expenditures divided by total Percentage 2_511 ECG expenditure to dollar (2012) value of distribution assets value of total 


distribution 


assets 


Enhanced Gross sales divided by total 0.2712 Asset TBD13 investment Ratio ECG

turnover assets (2012) ca acity 


Utility 


Financial 
 Operating Operating revenue minus -50.27M TBD14 $US ECG (2012) 


Im roved 


Health profit (loss) operating expenses 

System Sum of durations of all customer Outage Average interruptions divided by total TBD15 response time Interruption Hours TBD ECG customers in system (ECG improved Duration Index Target Regions) (SAIDI) 

Number of customer Unplanned System interruptions divided by total TBD16 outages and Average Number TBD ECG customers in system (ECG faults reduced Interruption Target Regions) 

8 All Capex is funded by money from GOG or donors. 9 Targets will be defined through additional financial modeling to be completed during Compact Implementation 

Period. 10 ECG Annual and Financial Report 2012 (Audited) 

11 Targets will be refined through additional financial modeling to be completed during Compact Implementation 

Period. O&M costs are largely dependent on location and climate Rates are typically close to 3% for power 

utilities in developed countries. 

12 ECG Annual and Financial Report 2012 (Audited) 13 Targets will be defined through additional financial modeling to be completed during Compact Implementation 

Period. 

14 Targets will be defined through additional financial modeling to be completed during Compact Implementation 

Period. 

15 Baseline and 5-year target to be established prior to entry into force. 

16 Baseline and 5-year target to be established prior to entry into force. 

ANNEX Ill- 7 
Frequency 

Index (SAIFI) 

Average 365 * [(Beginning accounts NTE 

Timely payment payables to power producers stated 

payments period to + ending accounts payables Days Unknown17 

contracts 

ECG 

made to power to power producers) I 2) (<45) 18 

sector entities producers /Total sales] 

Average 365 *[(Beginning accounts NTE 

payment 

period to payables to GRIDCo + Days Unknown19 stated ECG 

GhanaGrid ending accounts payables to contracts 

Compan GRIDCo) I 2) /Total sales] (<45) 

19.520 

1021 

Commercial System losses minus (2012) (Accra 

losses technical losses Percentage (Accra Region ECG 

Region only) only) 

Estimated MWh of power 1422 1023 

Distribution Technical dissipated in electricity (2012) (Accra 

system losses losses system components such as Percentage (Accra Region ECG 

reduced distribution lines, Region only) transformers only) 

Cash Recovery Index = 44.524 

29.225 

Distribution (20I2) 

system losses (I-system losses)* Percentage (Accra (Accra ECG collection rate region (ATC&C) ATC&C =I -Cash reg10n only) 

Recovery Index only) 

Table 1.3: NEDCo Financial and Operational Turnaround Project 

The following are Indicators and Targets for the monitoring ofthe NEDCo Financial and 

Operational Turnaround Project as further described in paragraph 2 of Part B of Annex I. Key 

Targets and Baselines for these Indicators will be defined prior to completion ofthe M&E Plan. 

17 Baseline to be established prior to entry into force. 


18 "Power Distribution Feasibility Studies, Ghana, Phase ll Report, Electricity Company of Ghana", prepared by CH2MHill, June 


2014, Chapter 9. 

19 Baseline to be established prior to entry into force. 

20 "Power Distribution Feasibility Studies, Ghana, Phase II Report, Electricity Company of Ghana", prepared by 

CH2MHill, June 20I4, Chapter 9, p. 11. 

21 Ibid. 


22 Baseline to be updated based on Loss Characterization Study to be completed prior to entry into force. 


23 "Power Distribution Feasibility Studies, Ghana, Phase II Report, Electricity Company of Ghana", prepared by 


CH2MHill, June 2014, Chapter 9, p. 11. 

24 Ibid. 

25 Ibid. 

ANNEX III - 8 
Outcomes 


Capital Total value of new 


expenditure equipment installed in 
 TBD26 TBD27 NEDCo 

(Capex) the distribution network 

Ratio of 

actual 

US$ 

Actual maintenance maintenance 10928 expenditures divided by Reinvestment expenditures Percentage 100 NEDCo Planned maintenance (2013) and to planned budget maintenance maintenance 


in capital 
 budget 


expenditure 
 Ratio of 

actual 


maintenance Actual maintenance 


expenditures expenditures divided by 
 Percentage 0.629 TBD30 NEDCo

to dollar total value of 


value oftotal distribution assets 


distribution 


assets 


Enhanced 


investment 
 0.24 NEDCo 31 Asset Gross sales divided by TBD32 Ratio 

capacity turnover total assets (2013)

Utility 


Financial 
 Operating revenue 25.31 33 Operating TBD Health minus operating US$ 34 NEDCo

profit (loss) (2012) Improved. expenses

Table 1.4: Regulatory Strengthening and Capacity Building Project 

The following are Indicators and Targets for the monitoring ofthe Regulatory Strengthening and 

Capacity Building Project as further described in paragraph 3 of Part B ofAnnex I. Key Targets 

and Baselines for these Indicators will be defined prior to completion ofthe M&E Plan. 

26 Baseline to be established prior to entry into force. 27 Targets will be defined through additional financial modeling to be completed during Compact Implementation Period. 

28 Based on un-audited accounts from NEDCo 1st-4th quarter variance report, 2013. Distribution Asset valued at 763.4 M Cedis; 

Expenditures 4.914 M Cedis. 29 Based on un-audited accounts from NEDCo 1st-4th quarter variance report, 2013. 30 Targets will be defined through additional financial modeling to be completed during Compact Implementation Period. 

Based on un-audited accounts from NEDCo 1st-4th quarter variance report, 2013. 32 Targets will be defined through additional financial modeling to be completed during Compact Implementation Period. 

33 NEDCo Financial Report, 2007 - 2012. Based on figures reported in Ghanaian Cedis (GHS) converted to mid-point 2012 

exchange rate ofGHS/USD of0.5415. Targets to be set in USO based on 2012 midpoint exchange rate. 34 Targets will be defined through additional financial modeling to be completed during Compact Implementation 

Period. 

ANNEX Ill-9 

31 
Outcomes 

Cost 

reflective 

tariff 

Cost recovery 

ratio 

Tariff per kWh divided by 

average cost per kWh of 

electricity supplied to 

customers times l 0035 

Percentage TBD36 TBD EC and 

PURC 

Automatic 

tariff 

adjustment 

Tariff 

adjustment and 

formula applied 

Tariff adjusted on scheduled 

time line and tariff formula 

appropriately applied 

throughout Com act 

Yes/No No Yes PURC 

Table 1.5: Access Project 

The following are Indicators and Targets for the monitoring of the Access Project as further 

described in paragraph 4 of Part B of Annex I. Key Targets and Baselines for these Indicators 

will be defined prior to completion of the M&E Plan. 

Increased legal 

grid 

connections 

in project areas 

Increased legal 

connections in 

project areas 

Outcomes 

Number of legal 

connections by 

MSMEs added to Number 

network in project 

areas 

TBD 

Increase 

over 

baseline37 

Enterprise 

Survey 

Table 1.6: Power Generation Sector Improvement Project 

The following are Indicators and Targets for the monitoring ofthe Power Generation Sector 

Improvement Project as further described in paragraph 5 of Part B ofAnnex I. Key Targets and 

Baselines for these Indicators will be defined prior to completion of the M&E Plan. 

35 Cost of service includes expenditures for Operations and Maintenance, Capital Replacement, and Capital 

Expansion. 36 Baseline and target for cost-reflective tariff will be derived from Tariff Plan to be completed under the project, 

which will include a Cost of Service Study. 37 Baseline and Target will be set based upon completion of a survey of markets planned to occur prior to entry into 

force. 

ANNEX III - 10 
Outcomes 

MWh of load shed 

from Transmission to Reduction GRID Co 

Load shed Distribution during the MWh TBD38 Load 

year due to lack of (2013) over Shedding 

available generation baseline39 

Report 

capacity 

Load Number oftimes in a 

GRIDCo 

shedding Frequency of 225 Reduction Load 

and outages load shed year that load shedding Number (2013) over Shedding 

reduced occurred baseline40 

Report 

Total duration in hours Reduction GRDICo 

Duration of of load shed during the Hours 4,255 Load 

load shed (2013) over Shedding year baseline41 

Repo1t 

Installed Total amount of power 2,840 EC Energy 

capacity installed plants can MW (2013) 500042 Statistics, 

generate (capacity) 

Installed capacity (in 

MW) of on-grid 

On-grid Share of onrenewable energy (as 

renewable grid defined in Renewable Percenta MoEP and 

energy renewable Energy Act, 2011 (Act <1%43 10% EC 

increased 832)) as a percentage of ge 

energy installed capacity (in 

MW) of on-grid 

conventional ca acity. 

Off-grid and 

mini-grid Total number of MW 

renewable Installed installed capacity of MW 0.8 30 

MoEP and 

energy capacity off-grid and mini-grid EC 

increased renewables. 

Absolute value of 

Value of additional private 

New IPP private capital committed for US$ TBD TBD44 EC 

generation investment in generation 

committed energy sector infrastructure at 

Financial Close 

IPP Total generation Increase 

Generation capacity committed by MW 0 over EC 

committed IPPs at Financial Close baseline45 

38 Baseline to be established prior to entry into force. 
 39 The ERR estimates that improving the reserve margin and energy efficiency and demand side management would 


amount to delivery of more than 270 million kilowatt-hours of service that now is largely foregone. 40 Target to be established prior to entry into force. 

41 Target to be established prior to entry into force. 

42 "National Energy Policy", MoEP, 2010 

ANNEX III - 11 
Table 1.7: Energy Efficiency and Demand Side Management Project 

The following are Indicators and Targets for the monitoring ofthe Energy Efficiency and 

Demand Side Management Project as further described in paragraph 6 of Part B of Annex I. Key 

Targets and Baselines for these Indicators will be defined prior to completion of the M&E Plan. 

Outcomes 

Increased 

energy savings 

as a result of 

street lighting 

Energy 

savings 

Total MWh of energy saved due to 

new or upgraded street lighting in 

ECG Target Regions 

MWh 0 TBD46 

EC 

4. Evaluation Component. 

While good program monitoring is necessary for program management, it is not sufficient for 

assessing ultimate results. MCC therefore advocates the use of different types of evaluations as 

complementary tools to better understand the effectiveness of its programs. As defined in the 

MCC M&E Policy, evaluation is the objective, systematic assessment of a program's design, 

implementation and results. MCC is committed to making its evaluations as rigorous as 

warranted in order to understand the causal impacts of its programs on the expected outcomes 

and to assess cost effectiveness. The Evaluation Component ofthe M&E Plan may contain three 

types of evaluation activities as necessary: (i) independent evaluations (impact and/or 

performance evaluations); (ii) self-evaluation, and (iii) special studies, each ofwhich is further 

described in the MCC M&E Policy. 

(a) Independent Evaluations. Every Project must undergo a comprehensive, 

independent evaluation (impact and/or performance) in accordance with the MCC M&E Policy. 

However, given the interdependent nature ofthe Projects for many Compact-wide outcomes, 

each project may not have its own specific evaluation plan. As appropriate, specific evaluations 

plans will be developed further and outlined in the final M&E plan. The Evaluation Component 

ofthe M&E Plan will describe the purpose ofthe evaluation, methodology, timeline, required 

MCC approvals, and the process for collection and analysis of data for each evaluation. All 

independent evaluations must be designed and implemented by independent, third-party 

evaluators. Ifthe Government wishes to engage an evaluator, the engagement will be subject to 

the prior written approval ofMCC. Contract terms must be acceptable to MCC and ensure nonbiased results and the publication ofresults. 

43 In 2013, less than 1 % of installed generation capacity was in the form of solar grid-intertied capacity as reported 

by the Energy Commission of Ghana in its report, 2013 Energy (Supply And Demand) Outlook for Ghana, 

dated April 2013. 44 Target to be defined based on sector Integrated Resource Plan to be funded under project. 45 Target to be defined based on sector Integrated Resource Plan to be funded under project. 46 Target to be established prior to entry into force. 

ANNEX III - 12 
For each independent evaluation, MiDA is expected to review and provide feedback to 

independent evaluators on the evaluation design reports, evaluation materials (including 

questionnaires), baseline report (if applicable), and any interim/final reports in order to ensure 

proposed evaluation activities are feasible, and final evaluation products are technically and 

factually accurate. 

It is expected that evaluations will focus on three main themes: (i) independent reviews and, as 

warranted, independent specification and estimation ofrelevant project ERRs; (ii) assessing 

household-level impacts ofthe relevant project investments and activities; and (iii) examining 

the broad benefits ofthe PSP on utility organization and management. 

The evaluations will assess the outcomes and impacts of individual Activities. Compact-wide 

evaluation questions will include the following: 

Overall Macro EYaluation Questions 

1. 	 What is the Program's overall impact on the profitability and productivity of enterprises? 

What are the mechanisms or channels through which these impacts occur? 

2. 	 To what extent do small, medium, and large firms respond to more reliable, accessible, 

and/or higher quality power by: 

a. 	 Expanding or intensifying production? 

b. 	 Expanding employment? 

c. 	 Investing in expanded plant or other fixed assets and/or different production 

technologies reliant on electricity? 

3. 	 How do small, medium, and large firms respond to higher electricity tariffs? How does the 

change in tariff affect the profitability and roductivity of businesses? -,,--,,-,.-.,,..-=~cr=,......,,,.,,.,.,,.~=-1 

',~~£~,\(~,~~~~~: 

4. 	 What is the community-level impact of improved power availability and quality? How do 

project benefits accrue differently to households and/or businesses that are not connected to 

grid but reside in communities with access to the electricity grid? 

Evaluation plans and methodologies for each project have not yet been fully developed. 

However, MCC and MiDA intend to explore the opportunity for developing impact evaluation 

designs for the Access Project and Energy Efficiency and Demand Side Management Project, 

which are described in this section. Specific Evaluation Plans for each project, as appropriate, 

will be developed further and outlined in the M&E Plan. Key evaluation questions for ECG and 

NEDCo Financial and Operational Turnaround Projects, the Regulatory Strengthening and 

Capacity Building Project, and the Power Generation Sector Improvement Project are listed in 

the table below. 

ANNEX III - 13 
ECG and NEDCo Financial and Operational Turnaround Projects Evaluation Questions 

1. 	 Did the infrastructure improvements lead to a reduction in technical losses and improve the 

quality ofpower? To what extent can these changes be attributed to the compact investments 

versus other investments or policy changes by the Government? 

2. To what extent did the activities improve the operational efficiency and the cost of 

distributing power? 

3. Did program interventions help increase legal connections? 

4. 	 Did the infrastructure improvements result in increased power available to customers, reduce 

the frequency and duration of outages? 

Regulatory Strengthening and Capacit)· Building Project Evaluation Questions 

1. 	 Did the project reduce "hidden costs" in the sector? 

2. Did the project support creation of an enabling environment for private investment? 

3. Did the project result in improved tariff targeting and greater real access/consumptions for 

the poor? How are the benefits distributed amongst different stakeholders? 

4. 	 Did the project lead to improved financial position of utilities and quality of service? To 

what extent did reforms contribute to greater cost savings and efficiency in the production 

and distribution of power? 

5. 	 Did public sector and regulatory reforms improve access to and consumption of power, 

particularly for the poor? Ifso, what components of the project - in particular, the lifeline 

tariff- improved access and I or consumption ofpower for the poor? 

P(m er Generation S<.·ctor I mprO\ ement Project E' aluation Questions 

1. 	 To what extent did the project securitize Ghana's gas sector, and has this securitization 

enabled Ghana to reduce its reliance on oil-based fuel? 

2. 	 To what extent has a third supply chain for gas been developed within Ghana's gas sector? 

3. 	 Did an IPP(s) enter Ghana's power generation market? How did they enter into the market? 

Are IPPs demonstrating interest in investing in the sector? 

4. Why have IPPs elected to enter or not enter into Ghana's power generation market? 

Access Project Evaluation Plan 

The Access Project represents an opportunity to generate evidence on the relative significance of 

different barriers that consumers experience in obtaining a connection to electricity. Moreover, 

data collected as part ofthe design and implementation ofthe project will provide information on 

the willingness to pay for electricity services among different consumer groups, and the resulting 

benefits of using electricity for social and productive purposes. Given that there are multiple 

suspected barriers to access for many markets and small enterprises in obtaining a legal 

connection, MCC and MiDA will explore the extent to which the design and roll-out ofthe 

project can be structured to facilitate a rigorous evaluation design that can test different 

assumptions about which interventions are most effective in expanding the ability ofsmall 

enterprises to obtain a safe and legal connection to the grid. For example, depending on the 

finalization ofproject activities, MCC and MiDA may assess the feasibility ofvarying 

interventions across project sites, including activities to streamline the connection process, install 

connection points for vendors, assist with certification ofwiring, ensure access to the lifeline 

tariff among eligible customers, or improve the coordination among utilities, markets, and 

districts in the planning for extension ofpower infrastructure. Further due diligence is required to 

better understand the potential costs and feasibility of various evaluation approaches; the goal of 

the evaluation will be to generate evidence and test assumptions about the most significant 

ANNEX III - 14 
barriers to access among impacted groups and to isolate relative effectiveness ofinterventions to 

reduce key barriers. · 

The evaluation will build on the experience ofthe Tanzania finance scheme impact evaluation, 

and attempt to learn from the following key assumption/ hypotheses from the program design: 

significant cost savings are achievable and can be transferred to customers, which will increase 

consumption for MSMEs. However, the most meaningful impacts on MSMEs and legal 

connections will be through relaxing non-financial and non-infrastructure barriers posing a 

constraint to access for MSMEs. 

Access Project Entluation Questions 

1. Which interventions are most effective in increasing legal access rates for the poor? Which 

interventions reduce the number ofillegal connections? 

2. What is the impact of access activities on the financial health ofthe utility? 

3. How does gaining legal access to electricity affect overall energy consumption and the 

choice offuel supply for lighting and other purposes at the enterprise level? 

4. Which interventions are most effective in increasing the productive uses of electricity for 

the poor? 

Energy Efficiency and Demand Side Management Project Evaluation Plan 

The Energy Efficiency and Demand Side Management Project offers a potential opportunity to 

integrate rigorous M&E into the design process and to use quantitative results to guide the design 

ofthe program. This evaluation strategy would utilize a randomized design with short 

"exposure" periods and rapid (e.g., one year) measurement and feedback loops, but the 

feasibility ofthis approach rests on the yet-to-be-defined based on selection criteria, geographic 

focus, and size oftarget groups by intervention (or subset ofinterventions). Ifsuch integration is 

possible, the result would be a better designed and implemented, more effective, and rigorously 

tested program that is tailored to the interests ofthe key end user, the EC. 

Not all interventions implemented as a part ofEnergy Efficiency and Demand Side Management 

Project are conducive to this approach, but at this preliminary stage, a subset ofinterventions has 

been identified as candidates for this pilot phase. The details ofthese interventions will need to 

be developed further in order to determine the feasibility ofimplementing them in concert with a 

rigorous evaluation. (In other words, this integrated implementation and evaluation approach 

may prove to be infeasible, in which case the Energy Efficiency and Demand Side Management 

Project will be evaluated using a different strategy that will be determined at a later time.) 

Energ~ Efficicnc~ and Demand Side l\lanagcment EYaluation Questions 

1. 	 To what extent do the demand side management interventions reduce average electricity 

growth demand? Are some interventions more effective in doing so than others? 

2. To what extent is customer reliance on diesel generators reduced as a result ofthe demand 

side management interventions? 

3. 	 (If feasible to study via piloting) Which implementation modalities of the 

information/education/communication and energy auditing activities are most effective in 

improving energy efficient use of electricity? 

ANNEX III - 15 
(b) Self-Evaluation. Upon completion ofthe Compact Term, both MCC and MiDA 

will comprehensively assess three fundamental questions: (i) did the Program meet the Program 

and Project Objectives; (ii) why did the Program meet or not meet the Program and Project 

Objectives; and (iii) what lessons can be learned from the implementation experience (both 

procedural and substantive). MiDA staff will draft the Compact Completion Report ("CCR") in 

the last year ofthe Compact Term to evaluate these fundamental questions and other aspects of 

Program performance. Each MiDA department will be responsible for drafting its own section to 

the CCR for its own activities, subject to cross-departmental review. 

(c) Special Studies. Plans for conducting special studies will be determined jointly 

between the Government and MCC before the approval ofthe M&E Plan. The M&E Plan will 

identify and make provision for any special studies, ad hoc evaluations, and research that may be 

needed as part ofthe monitoring and evaluating ofthis Compact. Either MCC or the Government 

may request special studies or ad hoc evaluations of Projects, Activities, or the Program as a 

whole, prior to the expiration ofthe Compact Term. 

The results of all evaluations will be made publicly available in accordance with the MCC M&E 

Policy. 

5. Data Quality Reviews. 

Data Quality Reviews ("DQR") are a mechanism to review and analyze the utility, objectivity, 

and integrity ofperformance information. DQRs are to cover: a) quality of data, b) data 

collection instruments, c) survey sampling methodology, d) data collection procedures, e) data 

entry, storage and retrieval processes, t) data manipulation and analyses and g) data 

dissemination. MCC requires that an independent entity conduct the DQR, such as a local or 

international specialized firm or research organization, or an individual consultant, depending on 

the size ofthe Program or Project in review. The frequency and timing of data quality reviews 

must be set forth in the M&E Plan; however, MCC may request a DQR at any time. DQRs 

should be timed to occur before or early enough in the Compact Term that meaningful remedial 

measures (if any) may be taken depending on the results ofthe review. The methodology for the 

review should include a mix of document and record reviews, site visits, key informant 

interviews, and focus groups. 

6. Other Components of the M&E Plan. 

In addition to the monitoring and evaluation components, the M&E Plan will include the 

following components: 

(a) Management Information System. The M&E Plan will describe the information 

system that will be used to collect data, store, process and deliver information to relevant 

stakeholders in such a way that the Program information collected and verified pursuant to the 

M&E Plan is at all times accessible and useful to those who wish to use it. The system 

development will take into consideration the requirement and data needs ofthe components of 

the Program, and will be aligned with existing MCC systems, other service providers, and 

ministries. 

(b) Budget. A detailed cost estimate for all components ofthe M&E Plan. 

ANNEX III - 16 
7. Responsibility for Developing the M&E Plan. 

MCC desires to "[refrain] from requesting the introduction ofperformance indicators that are not 

consistent with countries' national development strategies."47 For this reason, primary 

responsibility for developing the M&E Plan lies with the M&E directorate ofMiDA with support 

and input from MCC's M&E and economist staff. The M&E Plan must be developed in 

conjunction with key stakeholders, including MiDA leadership and sector leads, the MCC 

Resident Country Mission, and other MCC staff (such as Environmental and Social Performance 

and Social and Gender Assessment), as well as external stakeholders, as applicable. While the 

entire M&E Plan must be developed collaboratively, MCC and MiDA Project/ Activity leads are 

expected to guide the selection ofIndicators at the process and output levels that are particularly 

useful for management and oversight of Projects and Activities. 

8. Approval and Implementation of the M&E Plan. 

The approval and implementation ofthe M&E Plan, as amended from time to time, will be in 

accordance with the Program Implementation Agreement, any other relevant Supplemental 

Agreement and the MCC M&E Policy. All M&E Plan modifications proposed by MiDA must be 

submitted to MCC for prior written approval. The M&E Plan may undergo peer review within 

MCC before the beginning ofthe formal approval process. 

9. Post Compact M&E Plan. 

As part ofthe planning process for winding up the Program at the end ofthe Compact Term, 

MCC and MiDA will develop a post-Compact M&E Plan designed to observe the persistence of 

benefits created under this Compact. This plan will describe future monitoring and evaluation 

activities, identify the individuals and organizations that will undertake these activities, provide a 

budget framework for future monitoring and evaluation, and include the funding source for each 

ofthe activities specified in the plan. The post-Compact M&E Plan should built directly offthe 

Compact M&E Plan. 

The Government and MCC are committed to ensuring all the Projects are evaluable, are 

evaluated by an independent third party, and ensure that all project evaluations are transparently 

disseminated and discussed with stakeholders in a workshop in country. 

47 Busan Partnership for Effective Development Cooperation, Busan Outcome Document, 1 December 2011, p. 5 

ANNEX III - 17 
ANNEX IV 

CONDITIONS PRECEDENT 

TO DISBURSEMENT OF COMPACT IMPLEMENTATION FUNDING 

This Annex IV sets forth the conditions precedent applicable to Disbursements of Compact 

Implementation Funding (each a "CIFDisbursement'). Capitalized terms used in this Annex IV 

and not defined in this Compact will have the respective meanings assigned thereto in the 

Program Implementation Agreement. Upon execution ofthe Program Implementation 

Agreement, each CIF Disbursement will be subject to all ofthe terms ofthe Program 

Implementation Agreement, except that the conditions to each CIF Disbursement will continue 

to be those set forth in this Annex IV. 

1. Conditions Precedent to Initial CIF Disbursement. 

Each ofthe following must have occurred or been satisfied prior to the initial CIF Disbursement: 

(a) The Government (or MiDA) has delivered to MCC: 

(i) an interim fiscal accountability plan acceptable to MCC; and 

(ii) a CIF procurement plan acceptable to MCC. 

(b) The Government (or MiDA) has delivered to MCC: 

(i) evidence ofthe Government's intent to proceed with an Acceptable ECG 

PSP Transaction, in a form and substance acceptable to MCC; 

(ii) a copy ofthe Gas Action Plan approved by the Government in a form and 

substance acceptable to MCC; 

(iii) a copy ofthe Electric Distribution Utility Payment Action Plan approved 

by the Government, in a form and substance acceptable to MCC; and 

(iv) evidence of approval and implementation of quarterly tariff adjustments in 

accordance with formula that became effective prior to the initial CIF Disbursement. 

2. Conditions Precedent to all CIF Disbursements (Including Initial CIF 

Disbursement). 

Each ofthe following must have occurred or been satisfied prior to each CIF Disbursement: 

(a) The Government (or MiDA) has delivered to MCC the following documents, in 

form and substance satisfactory to MCC: 

(i) a completed Disbursement Request, together with the applicable Periodic 

Reports, for the applicable Disbursement Period, all in accordance with the Reporting 

Guidelines; 

(ii) a certificate ofthe Government (or MiDA), dated as ofthe date ofthe CIF 

Disbursement Request, in such form as provided by MCC; 
(iii) if a Fiscal Agent has been engaged, a Fiscal Agent Disbursement 


Certificate; and 


. (iv) if a Procurement Agent has been engaged, a Procurement Agent 
 Disbursement Certificate. 


(b) Ifany proceeds ofthe CIF Disbursement ace to be deposited in a bank account 

MCC ha~ received satisfactory evidence that (i) the Bank Agreement has been executed and di) 

the Permitted Accounts have been established. 

(c) Appointment of an entity or individual to provide fiscal agent services, as 

approved b?' MCC, until such time as the Government provides to MCC a true and complete 

copy of a Fiscal Agent Agreement, duly executed and in full force and effect, and the fiscal agent 

engaged thereby is mobilized. 

(d) Appointment of an entity or individual to provide procurement agent services, as 

approved by MCC, until such time as the Government provides to MCC a true and complete 

copy ofthe Procurement Agent Agreement, duly executed and in full force and effect, and the 

procurement agent engaged thereby is mobilized. 

(e) MCC is satisfied, in its sole discretion, that (i) the activities being funded with 

such CIF Disbursement are necessary, advisable or otherwise consistent with the goal of 

facilitating the implementation ofthis Compact and will not violate any applicable law or 

regulation; (ii) no material default or breach of any covenant, obligation or responsibility by the 

Government, MiDA or any Government entity has occurred and is continuing under this 

Compact or any Supplemental Agreement; (iii) there has been no violation of, and the use of 

requested funds for the purposes requested will not violate, the limitations on use or treatment of 

MCC Funding set forth in Section 2.7 ofthis Compact or in any applicable law or regulation; (iv) 

any Taxes paid with MCC Funding through the date ninety (90) days prior to the start ofthe 

applicable Disbursement Period have been reimbursed by the Government in full in accordance 

with Section 2.8(c) ofthis Compact; and (v) the Government has satisfied all ofits payment 

obligations, including any insurance, indemnification, tax payments or other obligations, and 

contributed all resources required from it, under this Compact and any Supplemental Agreement. 

(f) For any CIF Disbursement occurring after this Compact has entered into force in 

accordance with Article 7: MCC is satisfied, in its sole discretion, that (i) MCC has received 

copies of any reports due from any technical consultants for any Activity since the previous 

Disbursement Request, and all such reports are in form and substance satisfactory to MCC; (ii) 

the Implementation Plan Documents and Fiscal Accountability Plan are current and updated and 

are in form and substance satisfactory to MCC, and there has been progress satisfactory to MCC 

on the components ofthe Implementation Plan for any relevant Projects or Activities related to 

such CIF Disbursement; (iii) there has been progress satisfactory to MCC on the M&E Plan and 

Social and Gender Integration Plan for the Program or relevant Project or Activity and 

substantial compliance with the requirements ofthe M&E Plan and Social and Gender 

Integration Plan (including the targets set forth therein and any applicable reporting requirements 

set forth therein for the relevant Disbursement Period); (iv) there has been no material negative 

finding in any financial audit report delivered in accordance with this Compact and the Audit 

Plan, for the prior two quarters (or such other period as the Audit Plan may require); (v) MCC 

does not have grounds for concluding that any matter certified to it in the related MCA 

ANNEXIV-2 
Disbursement Certificate, the Fiscal Agent Disbursement Certificate or the Procurement Agent 

Disbursement Certificate is not as certified; and (vi) if any ofthe officers or key staff of MiDA 

have been removed or resigned and the position remains vacant, MiDA is actively engaged in 

recruiting a replacement. 

(g) MCC has not determined, in its sole discretion, that an act, omission, condition, or 

event has occurred that would be the basis for MCC to suspend or terminate, in whole or in part, 

this Compact or MCC Funding in accordance with Section 5.1 ofthis Compact. 

ANNEXIV-3 

ANNEXV 

DEFINITIONS 

609(g) Agreement has the meaning provided in Section 3.2(b). 

Acceptable ECG PSP Provider means a competitively selected private sector entity which meets the 

following criteria, as determined by MCC: 

(a) has relevant technical experience and a proven track record ofhelping electricity distribution 

companies ofsimilar size and scope as ECG to become profitable; 

(b) has relevant experience in developing countries; 

(c) has adequate financial capacity as evidenced by the ability to satisfy the minimum equity 


threshold and tangible net worth requirement set forth in the tender documents released by the 


Governmentfor the Acceptable ECG PSP Transaction; and 


(d) is selected through a bidding process based upon parameters to be designed to maximize 


value for the Government and meet Government objectives. 


Acceptable ECG PSP Transaction means the long-term concession or partial privatization agreement 

among the Government and an Acceptable ECG PSP Provider that leverages private capital to address 

operational and commercial competencies necessary for the specific challenges ofECG 's operation 

which meets the following criteria, as determined by MCC: 

(a) includes a strategic partner meeting the requirements ofthe Acceptable ECG PSP Provider; 

(b) results from an open, competitive, and transparent process; 

(c) encourages local participation at both the ownership and operational levels; 

(d) is sensitive to local customs and conditions; 

(e) ensures the equitable treatment ofECG staff; and 

(/) applies a corporate-wide approach with respect to operations, management and governance 


ofECG. 


Acceptable NEDCo PSP Provider means a competitively selected private sector entity which meets the 

following criteria, as determined by MCC: 

(a) has relevant technical experience and a proven track record ofhelping electricity 

distribution companies ofsimilar size and scope as NEDCo to become profitable; 

(b) has relevant experience in developing countries; 

(c) is financially solvent; and 

(d) will apply a corporate-wide approach with respect to operaiions and management of 

NEDCo. 

Acceptable NEDCo PSP Transaction means the no less than five (5) year agreement between the 

Government and an Acceptable NEDCo PSP Provider under which operational control ofNEDCo is 

vested in an Acceptable NEDCo PSP Provider which results from an open, competitive and transparent 

process and is in form and substance acceptable to MCC. 

Activity has the meaning provided in Part B ofAnnex 1 

Additional Representative has the meaning provided in Section 4.2. 

AgreedMDAs means the MDAs specified in the agreed list provided by ECG and NEDCo to MCC on or 

about the date hereof, as amended from time to time. 

Audit Guidelines has the meaning provided in Section 3.8(a). 

Baseline has the meaning provided in paragraph 3(a)(i) ofAnnex Ill 
BilateralAgreement has the meaningprovided in Section 2. 9. 


Board has the meaning provided in paragraph 1 (a) ofPart C ofAnnex 1 


CCR has the meaningprovided in paragraph 4(b) ofAnnex Ill 


CIFDisbursement has the meaningprovided in Annex IV. 


Compact has the meaningprovided in the Preamble. 


Compact Goal has the meaningprovided in Section 1.1. 


Compact Implementation Funding has the meaningprovided in Section 2.2(a). 


Compact Records has the meaningprovided in Section 3. 7(a). 

Compact Term has the meaning provided in Section 7.4. 

Constraints Analysis has the meaning provided in paragraph 1 (a) ofPart A ofAnnex 1 

Covered Provider has the meaning provided in the Audit Guidelines. 

Disbursement has the meaning provided in Section 2. 4. 

DQR has the meaningprovided in paragraph 5 ofAnnex 111 

EC has the meaningprovided in paragraph 3(a)(i) ofPart B ofAnnex 1 

ECG means the Electricity Company ofGhana. 

ECG Target Regions means (a) the Accra East andAccra West ECG service areas, (b) areas which are 

in close proximity to Accra, whose source ofsupply is from Accra and whose load contribute to losses in 

the Accra network, (c) other regions as may be determined based on recommendationsfrom the 

feasibility studyfunded under the 609(g) Agreement, or (d) other regions mutually agreed between the 

Government and MCC. 

Economic Enclave means a designated geographic area within a community where people with common 

and varied productive skills apply these for economic gain. 

Electric Distribution Utility PaymentAction Plan means the plan delivered by the Government to MCC 

on or about June 18, 2014 to settle all arrears due to ECG and NEDCo by all MDAs which have been 

incurredprior to the execution ofthis Compact and the procedure to maintain current on allfuture 

payments to ECG and NEDCo. 

ERP has the meaningprovided in paragraph 1 (a)(ii)(B) ofPart B ofAnnex 1 

ERR has the meaning provided in paragraph 2(a) ofPart B ofAnnex 1 

ES/A has the meaning provided in paragraph 3 ofPart A ofAnnex 1 

ESMF has the meaningprovided in paragraph 1 (b) ofPart B ofAnnex L 

ESMP has the meaning provided in paragraph 3 ofPart A ofAnnex L 

ANNEXV-2 
ESMS has the meaning provided in paragraph 3 ofPart A ofAnnex l 


Evaluation Component has the meaning provided in paragraph 1 ofAnnex Ill 


Excess CIFAmount has the meaning provided in Section 2.2(d). 


FESIA has the meaning provided in paragraph 1 (c) ofPart B ofAnnex l 


Financial Close means all documents necessary to undertake the relevant transaction have been executed 


and all parties have received any .financing necessary to undertake the relevant transaction. 


First Compact has the meaning provided in paragraph 1 (a) ofPart A ofAnnex l 


Fiscal Agent has the meaning provided in paragraph 3 ofPart C ofAnnex l 


Gas Action Plan means the short term plan delivered by the Government to MCC on or about June 18, 


2014 which provides the framework for the institutionalization, commercialization and securitization of 


the Ghanaian gas sector. 


Gas Sector Master Plan means the medium to long term plan approved by the Government which 


provides the strategy for infrastructure development priorities that will contribute to the development of 


the country's natural gas resources and security ofenergy supply as well as recommendations for a 


suitable institutional and regulatory framework and gas pricing and a/location policies. 


GDP has the meaning provided in paragraph 1 (b) ofPart B ofAnnex l 


Ghana has the meaning provided in the Preamble. 


GIS has the meaning provided in paragraph 1 (a)(ii)(A) ofPart B ofAnnex l 


Governance Guidelines means MCC 's Guidelinesfor Accountable Entities and Implementation 


Structures. 


Government has the meaning provided in the Preamble. 


Grant has the meaning provided in Section 3.6(b). 


IFC means the International Finance Corporation, an international organization established by 


Articles ofAgreement among its member countries including Ghana. 


Implementation Letter has the meaning provided in Section 3.5. 


Implementing Entity has the meaning provided in paragraph 2 ofPart C ofAnnex l 


Implementing Entity Agreement has the meaning provided in paragraph 2 ofPart C ofAnnex l 


Indicators has the meaning provided in paragraph 3(a) ofAnnex Ill 


Inspector General has the meaning provided in Section 3. 7(c). 


Intellectual Property means all registered and unregistered trademarks, service marks, logos, names, 


trade names and all other trademark rights; all registered and unregistered copyrights; allpatents, 

inventions, shop rights, know how, trade secrets, designs, drawings, art work, plans, prints, manuals, 

computer files, computer software, hard copy files, catalogues, specifications, and other proprietary 

ANNEXV-3 
technology and similar information; and all registrations for, and applications for registration oj any of 

the foregoing, that are financed, in whole or in part, using MCC Funding. 

/PP has the meaning provided in paragraph 5(a) ofPart B ofAnnex 1 

/PP Solicitation Plan has the meaning provided in paragraph 5(a)(iii)(C) ofPart B ofAnnex 1 

/RP has the meaning provided in paragraph 5(a)(iii)(A) ofPart B ofAnnex 1 

ITT has the meaning provided in paragraph 3(a)(vi) ofAnnex III 

LNG has the meaning provided in paragraph 5(a)(iii) ofPart B ofAnnex 1 

M&E has the meaning provided in paragraph 1 ofAnnex III 

M&E Plan has the meaning provided in Annex III 

Management Team has the meaning provided in paragraph 1 (a) ofPart C ofAnnex 1 

Market means a space within a community managed and controlled by a local authority where people 

converge to transact in socio-economic activities to improve their living standards. 

MCA Act has the meaning provided in Section 2.2(a). 

MCC has the meaning provided in the Preamble. 

MCC Environmental Guidelines has the meaning provided in Section 2. 7(c). 

MCC Funding has the meaning provided in Section 2.3. 

MCC Gender Policy means the MCC Gender Policy (including any guidance documents issued in 

connection with such policy). 

MCC M&E Policy has the meaning provided in Annex Ill 

MCC Program Closure Guidelines means the MCC Program Closure Guidelines (including any 


guidance documents issued in connection with such guidelines). 


MCC Program Procurement Guidelines has the meaning provided in Section 3.6(a). 


MCC Website means the MCC website at www.mcc.gov. 


MDAs means all ministries, departments and agencies within the Government. 


Micro, Small, andMedium Enterprises or MSMEs mean formal or informal businesses that employ: 


Micro: less than 6 people 


Small: between 6 and 29 people 


Medium: between 30 and 99 people 


MiDA has the meaning provided in Section 3.2(b). 

MoEP has the meaning provided in paragraph 3(a)(i) ofPart B ofAnnex 1 

Monitoring Component has the meaning provided in paragraph 1 ofAnnex III 

ANNEXV-4 
Multi-Year Financial Plan Summary has the meaning provided in paragraph 1 ofAnnex II 

NDPC has the meaning provided in paragraph 3(a)(i) ofPart B ofAnnex 1 

NEDCo means the Northern Electricity Distribution Company. 

NEDCo Target Regions means the Sunyani, Tamale, Techiman NEDCo operational areas or other 

NEDCo operational areas as may be determined based on recommendations from (a) the feasibility study 

funded under the 609(g) Agreement, (b) the studies undertaken under Annex I Section B 2(a)(ii)(l), or 

(iii) other NEDCo operational areas mutually agreed between the Government and MCC. 


Partnership for Growth has the meaning provided in paragraph 1 (a) ofPart A ofAnnex 1 


Party and Parties have the meaning provided in the Preamble. 


PermittedAccount has the meaning provided in Section 2. 4. 


Power Africa has the meaning provided in paragraph 1 (/) ofPart B ofAnnex 1 


Principal Representative has the meaning provided in Section 4.2. 


Procurement Agent has the meaning provided in paragraph 4 ofPart C ofAnnex 1 


Program has the meaning provided in the Preamble. 


Program Assets means any assets, goods or property (real, tangible or intangible) purchased orfinanced 


in whole or in part (directly or indirectly) by MCC Funding. 


Program Funding has the meaning provided in Section 2.1. 


Program Guidelines means collectively the Audit Guidelines, the MCC Environmental Guidelines, the 


Governance Guidelines, the MCC Program Procurement Guidelines, the Reporting Guidelines, the MCC 

M&E Policy, the MCC Cost Principles for Government Affiliates Involved in Compact Implementation, 

the MCC Program Closure Guidelines, the MCC Gender Policy, the MCC Gender Integration 

Guidelines, the MCC Guidelinesfor Economic and Beneficiary Analysis, the MCC Standardsfor Global 

Junded 

Project 

Project(s) 

Program 

Program 

Marking, 

compact 

Objective(s) 

Implementation 

and 

Objectives 

has 

any 

the 

programs, 

meaning 

other 

has 

has 

guidelines, 

the 

the 

Agreement 

provided 

in 

meaning 

meaning 

each case, 

policies 

in 

provided 

provided 

and 

Section 

as 

PIA 

such 

or guidance 

in 

in 

1.2. 


have 

may 

Section 

Section 

the 

be posted

papers 

meaning 

1.3. 


1.2. 


from 

relating 

provided 

time 

to 

to 

the 

in 

time 

Section 

administration 

on the 

3.1. 


MCC 

of

Website. 


MCCProvider means (a) any entity ofthe Government that receives or uses MCC Funding or any other 


Program Asset in carrying out activities in furtherance ofthis Compact or (b) any thirdparty that 

receives at least US$50,000 in the aggregate ofMCC Funding (other than as salary or compensation as 

an employee ofan entity ofthe Government) during the Compact Term. 

PSP means private sector participation. 


Public Lighting means lighting in public areas ofMarkets, Economic Enclaves and social institutions. 


ANNEXV-5 

PURC has the meaning provided in paragraph 3(a)(i) ofPart B ofAnnex I 


RAP has the meaning provided in paragraph 3 ofPart A ofAnnex I. 


Reform Unit has the meaning provided in paragraph 1 (h) ofPart B ofAnnex 1 


Reporting Guidelines means the MCC Guidance on Quarterly MCA Disbursement Request and 


Reporting Package. 


RPFhas the meaning provided in paragraph 3 ofPart A ofAnnex I. 


Social and Gender Integration Plan has the meaning provided in paragraph 4 ofPart A ofAnnex 1 


Stakeholders Committee has the meaning provided in paragraph 1 (e) Part C ofAnnex I. 


Supplemental Agreement means any agreement between (a) the Government (or any Government 


affiliate, including MiDA) and MCC (including, but not limited to, the PIA), or (b) MCC and/or the 

Government (or any Government affiliate, including MiDA), on the one hand, and any third party, on the 

other hand, including any ofthe Providers, in each case, setting forth the details ofany funding, 

implementing or other arrangements in furtherance of and in compliance with, this Compact. 

Target has the meaning provided in paragraph 3(a)(ii) ofAnnex III. 


Targeted Markets and Economic Enclaves means Markets and Economic Enclaves within the ECG and 


NEDCo Target Regions that meet mutually agreed upon selection criteria for participation in the Access 

Project. 

Targeted Social Institutions means selected schools and health centers in the vicinity ofthe Targeted 

Markets and Economic Enclaves. 

TariffPlan means the phased implementation plan to be delivered by the Government to MCC on or 

prior to the first anniversary following the entry into force ofthis Compact setting out a course ofaction 

to move ECG and NEDCo to full cost recovery tariffs. This full cost recovery tariffshould include 

recovery ofoperating expenses, financing costs actually incurred by ECG and NEDCo, capital 

replacement charges and capital expansion charges so that tariffs reflect ECG and NEDCo 's long-run 

marginal costs. The Government will also seek to ensure adequate protection ofpoor and vulnerable 

groups through a lifeline tariffor other mechanism in a manner which is consistent with average total 


cost recovery and efficient utilization ofelectricity. 


Taxes has the meaning provided in Section 2.8(a). 


Tranche I Funding has the meaning provided in Section 2.1. 


Tranche II Funding has the meaning provided in Section 2.1. 


United States Dollars or USD or US$ means the lawful currency ofthe United States ofAmerica. 


USAID has the meaning provided in paragraph 1 (a) ofPart A ofAnnex 1 


USG has the meaning provided in paragrapj 1 (a) ofPart A ofAnnex 1 


ANNEXV-6