The government is still taking steps to secure the second tranche of $190 million compact funds from the American government, in spite of the suspension of a concessionaire agreement with Power Distribution Services (PDS) for alleged contract breaches.
Offering the power distribution arm of the Electricity Company of Ghana (ECG) to a private sector company to manage on concession was a condition precedent for the full implementation of Ghana’s Power Compact with the Millennium Challenge Corporation (MCC) of the United States of America (USA).
Consequently, the government had constituted a team to engage the MCC to secure the future of the compact, the Minister of Information, Mr Kojo Oppong Nkrumah, told journalists at a press briefing in Accra yesterday.

He said “this engagement is about the possible next steps after the inquiry and channels for sharing information as part of this enquiry”.

According to him, the team would visit the United States, possibly next week, as part of its engagement.


A statement issued by Mr Nkrumah last Tuesday announced the suspension of the concession agreement and explained that the decision followed the “detection of fundamental and material breaches of PDS’s obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which were 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 said.

Following from that, the re-transfer of ECG assets had begun, while investigations continued, both at home and abroad, the statement said.


Updating the media on the issue, Mr Nkrumah said a full-scale enquiry into the detected breaches had commenced and was expected to be completed within 30 days.

He said the team conducting the enquiry comprised insurance investigation experts, officials of the Energy and the Finance ministries and officials of the ECG and the Millennium Development Authority (MiDA).

“The enquiry will determine the nature of the breaches and advise on suggested next steps. By Tuesday, the team is expected in Doha, Qatar as part of the enquiry. All interested parties are cooperating with the enquiry at this stage,” he explained.


The Information Minister further explained that final efforts to ensure a smooth transition between ECG and PDS officials were proceeding without any incidents.

“We reiterate the fact that this breach was discovered by the due diligence of the Ghanaian authorities through the ECG and with the support of state agencies,” he emphasised.

He stressed that “for the avoidance of doubt, the provision of the payment guarantee has always been a condition precedent and was never changed to a condition subsequent, as is being speculated by some persons”.

Due diligence

According to Mr Nkrumah, initial due diligence, led by the transaction advisors, did not detect anything wrong, but the second level checks, led by the Ghana side, initially yielded a response from Al-Koot, confirming the guarantee.

A third level check led by the Ghanaian side, according to him, resulted in the detection of anomalies within Al-Koot, thereby, triggering a fourth level check.

“The fourth level check involved sending an initial team from the Ghana Mission in Qatar to engage with Al-Koot officials for further verification. This fourth level check further proved the anomalies and suggested untoward action which is now the subject of the full-scale inquiry,” he disclosed.


Providing further answers to journalists, Mr Nkrumah urged the African Centre for Energy Policy (ACEP), the Institute of Energy Security (IES) and other persons who had raised issues to patiently wait for the outcome of the investigations.

Asked if PDS had injected $580 million into its operations, he declined to answer, on grounds that all concerns would be addressed after investigations had been completed.

Power supply

For his part, the Minister of Energy, Mr John Peter Amewu, said due diligence was ongoing to unravel all issues surrounding the matter.

He assured the public that there would be uninterrupted supply of power, in spite of the issues surrounding the deal.

Minority jabs

Meanwhile the Minority Caucus in Parliament has called for the immediate termination of the PDS Concession Agreement to ensure efficient and sustainable delivery of power.

It also called for the prosecution of all those responsible for the fraudulent guarantee, as confirmed by the Minister of Energy, and ensure full refund of all money appropriated by PDS and their collaborators through the alleged fraudulent schemes.

At a press conference at Parliament House in Accra yesterday addressed by the National Democratic Congress (NDC) Member of Parliament (MP) for Yapei Kusawgu, Mr John Abdulai Jinapor, the Minority served notice that it would not countenance any attempt by the government to reintroduce other so-called private sector players or the constitution of a special purpose vehicle (SPV) which it claimed had been on the government’s table for a while.

Restructure ECG

Mr Jinapor, a former Deputy Minister of Energy, called on the government to, as a matter of urgency, dissolve the current ECG Board and appoint a competent, non-partisan board and restructure the current management of the ECG to ensure that they sign performance bonds with the board for efficient supply of power to Ghanaians.

He alleged that the so-called suspension of the concession was only a smokescreen to cover up the government’s supposed “complicity in the whole scandal of gargantuan proportion” and, therefore, must be terminated without any further delay.

“As it stands, the concession in its current state will certainly not serve the interest of Ghana. The concession is highly inimical to the aspirations of Ghana’s power sector goals and can tip our dear country into “Dumsor” because of choking debts, not because independent power producers (IPPs) lack capacity to produce power,” he said.

According to him, the concession, if left to continue, had the potential of destabilising the whole energy sector, with very serious consequences, including rising cost of power and crippling power generation companies.


He said as a result of a deliberate mismanagement of yet another project by former President Mahama, IPPs, for the first time in the history of the country, recently served a seven-day ultimatum to the government to release funds to pay all outstanding debts or they shut down.

Mr Jinapor said the debts were estimated at $300 million as of June 2019.

He recalled that the Minority cautioned the government against the deal on the floor of Parliament when it was discovered that the Ghanaian shareholders in the transaction had questionable records.

He alleged that at the time of filling the documents, some of the partners to the consortium (TG Energy Solutions) had neither offices nor physical location per the documents presented to the Mines and Energy Committee of Parliament by MiDA.

MiDA’s image

The Minority said it was their expectation that in the coming weeks the MCC of the United States would apprise itself of the facts and take appropriate actions to preserve the image of MiDA.

It warned that other legitimate options to delve into the scandal were beckoning and it would actively take advantage of them if the government refused to heed its patriotic call to save Ghana’s energy sector, the ECG and its workers.

Source: Graphic Online

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