Accra, Ghana, July 30, 2019, Ghana has suspended its U.S backed concession agreement with Power Distribution Services (PDS) Ghana Limited with immediate effect.
Announcing the decision in a press release on Tuesday evening (July 30, 2019), the Minister of Information, Kojo Oppong Nkrumah, said the decision followed the detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which have been discovered upon further due diligence.
“The Demand Guarantees were key prerequisites for the lease of assets on 1st March, 2019 to secure the assets that were transferred to the concessionaire,” it added.
The release stated: “The government is conducting a full enquiry into the matter, and the outcome will inform the next course of action. Government has taken steps to ensure distribution, billing and payment services continue uninterrupted.”
The government therefore assured the general public and customers “that this development will not interfere with the distribution of electricity services to customers.”
For the record, Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC), on the side-lines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014 attended by H.E. President John Dramani Mahama.
Under the Power Compact, six projects were being implemented to address the root causes of the unavailability and unreliability of power in Ghana.
The projects included ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project and Access Project.
The rest are Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project.
The private sector company was expected to turnaround the operations of ECG to make it profitable. In addition, the new concessionaire was expected to improve access to electricity while cutting down on waste in the system to block all leakages that drain the financials of ECG.
African Eye Report
