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22.03.2005 Business & Finance

Switzerland gives $10m for Power Sector Reforms

By GNA

Accra, March 22, GNA - Ghana's Power Sector Reforms on Tuesday received a boost with the signing of a Memorandum of Understanding for 10 million dollars from Switzerland for the reconstitution of the Volta River Authority (VRA) into two separate companies.

The MOU signed between the governments of Ghana and Switzerland would turn the VRA into a Hydro Company responsible for hydro generation and another company to own the Aboadze Thermal Power Complex. It is the conclusion of a Cabinet meeting in March of 2004 on the power sector reforms.

Prof Mike Ocquaye, Minister of Energy, signed for Ghana while Mr Oscar Knapp, Swiss Minister of International Development and the head of a visiting Swiss Business Delegation to Ghana, signed for his country.

Prof Ocquaye said the signing formed an important aspect of the power sector reform under the multi-donor budget support programme operated by the Ghana government and her development partners. He expressed optimism that the provision of funds at this time would ensure completion of the reconstitution in two to three years. Tenders would be out soon and work would start not later than June 2005.

The Energy Minister said the Cabinet had already reconfirmed its decision to establish a separate Transmission Company wholly owned by government to offer a level playing field for all participants in the power market.

The Electricity Company of Ghana (ECG) and the Northern Electricity Department (NED) are also to become a single Distribution Company. Cabinet also approved a memorandum to put in place a Management Support Services Agreement (MESSA) with the aim of improving the operational performance of the distribution utilities, namely ECG and the NED.

The 10 million-dollar-grant would be used as payments to the private service provider under the MESSA, effect change management activities within the ECG and finance poverty-focused infrastructure improvements.

Mr Knapp said the decision to support the reforms was an important one for the Swiss government, which focused on providing increased support to the private sector.

He expressed satisfaction with the Government for coming up with the idea, saying that they would support it fully and ensure that it was fruitful, "especially as it comes under the Poverty Reduction Strategy".

Mr Knapp said the business delegation had expressed interest in Ghana's textile, chemical and cocoa industries.

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