Siemens AG and Ghana signed a Memorandum of Understanding to address the nation’s electricity grid using 250 million euros of financing from Germany.
According to the statement, Siemens and Ghana Grid Co. will also use the funding to improve the country’s ability to supply other West African nations, including Burkina Faso, Togo and Benin.
The utility is crippled by debt and has struggled to meet financial obligations including a $170 million facility with the French Development Agency, its chief executive officer, Jonathan Amoako-Baah, said in November. At the time, state-owned companies alone owed GridCo 976 million cedis ($171.9 million), forcing the company to suspend some projects, he said.
A Memorandum of Understanding, to this effect, was signed at Jubilee House, by Mr. Jonathan Amoako-Baah, CEO of the Ghana Grid Company (GRIDCo), on behalf of the Government of Ghana, and by Sabine Dall’Omo, a representative of Siemens, in the presence of President Nana Akufo-Addo and the President and Chief Executive Officer of Siemens AG, Mr. Joe Kaeser.
The signing of the MoU has seen Ghana receive a quarter of the €1 billion funds put in place by the German Government as part of Germany’s Compact with Africa programme, to boost the private sector in Compact countries, of which Ghana is one.
Under the agreement, the two companies will work not only to improve Ghana’s electricity grid capacity and stability but also help ensure that the country expands her ability to export power to neighbouring countries in West Africa, such as Burkina Faso, Togo and Benin.
Witnessing the event, Nana Addo Dankwa Akufo-Addo, described the signing ceremony as a very important development in the energy sector of the country, adding that “the people from GRIDCO know, as well as I do, how necessary it is to undertake this project – the retooling, and refitting of our transmission and grid system across the country”.
The importance of the project, he underscored, stems from the “kind of future that we want to design for ourselves as a rapidly industrialising economy, that is going to be focused on important infrastructural developments, as well as big resource developments in our bauxite, manganese, and iron ore industries. All of this is going to have to be focused very much on reliable accessibility to power and the rest.”
With Ghana being the first country in Africa to benefit from a significant transaction from the ‘Compact with Africa’ programme, the President indicated that this “is, in itself, a big vote of confidence by the German leadership and Chancellor Merkel and yourself, one of the great German companies, to work in our country.”
The President stressed further, “We welcome that expression of confidence, and we want to assure you that it is not one that we will abuse. We, on our part, are determined to work in transparency and openness with you, to make sure that this project comes to a proper conclusion.”
Also commenting, Mr. Joe Kaeser, President and Chief Executive Officer of Siemens AG, stressed that “the MOU will, together with our partner GRIDCO, modernize the whole grid of Ghana in steps, one at a time, and also organize the grids and bring the power to the people in a more efficient way. It will also help young people and train them and educate them for the future.”
He added that the Compact with Africa initiative is about the future of Africa.
“It is about showing them the way and on how to lead; and the first thing in this future in this vision is about electrification. It is about energy. The agreement is not only about supplying grids or products or solutions, it is about being a proud, responsible and an honoured partner to Ghana, and to the Ghanaian people, so that we can build this country for the future,” the Siemens President added.