This follows after the government of Ghana terminated the contract it had with PDS to supply power to the southern part of the country.
The US government said it has given the Ghana government up to October 30 to reverse the decision or face the consequences of the decision, which will be to lose $190 million under the Millennium Challenge Corporation (MCC) Compact II.
The US government through the MCC captured this in a letter addressed to Ghana’s Finance Minister dated October 18, 2019.
The MCC asked Ghana to “reinstate the concession rights of Power Distribution Services Limited (PDS) as contemplated under the agreements governing the ECG-PSP…”
By that, the MCC wants Ghana to restore the lease and assignment agreement, bulk supply agreement and government support agreement which form the PDS-ECG PSP transaction agreement.
It asked the government to restore the PDS-ECG agreement and then restructure same by “facilitating the restructuring of the equity interest of PDS”.
Again, it asked Ghana to “maintain the framework and the terms and conditions of the existing transaction agreement unless otherwise agreed to by all parties”.
MMC is also asking Ghana to maintain Meralco “in its current roles of financial lead shareholder, operation lead shareholder and developing country lead shareholder”.
The government of Ghana per the letter from the MCC is also to facilitate equity participation of potential Ghanaian institutional investors in the transaction in a fair and transparent manner “while handling the rights of the existing shareholders.”
The Government of Ghana through the Minister of Finance, Ken Ofori-Atta terminated the Concession Agreement it had with the Power Distribution Services (PDS) Limited over the take-over of the assets of the Electricity Company of Ghana (ECG).
This meant that the PDS will no longer distribute electricity in the southern sector of the country as it used to do.
According to the Finance Minister, the move was necessitated by a forensic audit conducted by the Millennium Challenge Corporation (MCC) and Government of Ghana's investigations into the issuance of Demand Guarantees for the Concession Transaction, which revealed that the Payment Security for the Transaction was invalid.
The investigations re-affirmed the earlier report that there was no approval by Competent Signatories to the Demand Guarantees issued by Al-Koot in Qatar, therefore, the Transaction lacked the required authorisation and approval of the Company.
More so Al-Koot has an underwriting policy and guidelines which required the approval of the Central Bank of Qatar, but no such approval was granted by the Central Bank of Qatar.
In view of that, President Nana Akufo-Addo and Chief Executive Officer of the MCC, Mr Caircross agreed that the existing Concession between PDS and ECG.