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Ecg Concession Agreement

Accra, GHANA – On October 19, 2019, the Government of Ghana (GoG) informed the Millennium Challenge Corporation (MCC) of Washington, D.C. of its decision to terminate the concession agreement between the Ghana Electricity Company (ECG) and the private operator Power Distribution Services Ghana Ltd (PDS). These contradictory assertions are extremely disturbing. The U.S. Embassy statement does not specify whether the independent investigation was conducted separately from goG`s. Given that in recent years GoG has worked closely with the Millennium Challenge Corporation (MCC) in the concession contracting process, one would think that both parties would be talking about the same script on such a critical issue. It is now up directly to GoG to put an end to this disagreement and explain to the public why its version is the truth, if it is indeed the case. The United States of America takes note of this decision with regret. Based on the findings of the independent mediality investigation, the U.S. position is that the transfer of the operation, maintenance and management of the Southern Distribution Network to the private dealership was valid on March 1, 2019, and the termination is therefore unjustified. As a result, MCC confirmed that the $190 million awarded to Ghana in the transfer to the 20-year ECG concession to PDS on March 1 is no longer available.

The alleged divestment took place after the PDS consortium was awarded as an electrical service provider in all ECG operating areas in Ghana`s southern distribution area, under a 20-year concession contract approved by the government. On March 1, 2019, Power Distribution Services, Ltd. (PDS) took over the operations and management of the personnel and assets of the Electricity Company of Ghana (ECG) under a 20-year concession contract. Private sector participation is a major reform of the CCG Power Compact. This is a critical issue for the long-term sustainability of infrastructure investments and the financial recovery of Ghana`s energy sector. « As such, MCC has confirmed that the $190 million awarded to Ghana in the transfer to the 20-year ECG concession to PDS on March 1 is no longer available, » he added. In recent weeks, the national debate on this issue has focused primarily on issues related to performance assurance and the subsequent expiration of the $190 million tranche II amount under the MCC Compact. However, there is an important issue on which the GoG and public opinion should think together and seriously before the country enters into a new concession contract. Meralco stated that PDS had received guarantees of a request in good faith and was not aware of any issue until the concession was suspended.

In the initial phase of the research process that enabled PDS to become a dealer, GoG and MCC reportedly agreed on an 80/20 per cent distribution of foreign/domestic ownership. However, the structure was then changed at GoG`s request after the election of a new government in a domestic property and 49 percent foreign. Four of the six shortlisted candidates then sent letters to the Millennium Development Authority (MiDA), the position appointed by the GoG to oversee the selection process, informing it of its intention to withdraw from the tendering process.

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