The Ministry of Energy and Green Transition has given an assurance that it is taking all necessary legal and administrative steps to recover any amounts due to Electricity Company of Ghana (ECG) following the fraudulent contractual arrangement between the power distributor and Power Distributor Services (PDS) Ghana Limited.
This follows the ruling of the London Court of International Arbitration (LCTA) in the matter between PDS and ECG over the termination of the contract between them.
The court ruled that the government was entitled to terminate the concession agreement because the Demand Guarantees issued in respect of the transaction were invalid from the outset (void ab initio).
In a statement signed and issued by the Spokesperson and Head of Communication of the ministry, Richmond Rockson, the situation should never have arisen in the first place but for the poor decisions made during the selection and approval process of the concessionaire.
Those decisions, it said, led to the formation of PDS under the previous administration, which directly contributed to the current outcome.
“As a result of those decisions, Ghana lost approximately $190 million in compact funding from the U.S. Millennium Challenge Corporation (MCC) in 2019 and missed a critical opportunity to implement key reforms within the Electricity Company of Ghana (ECG),” the statement said.
The ministry reaffirmed its commitment to accountability, transparency, and sustainable energy reforms consistent with President John Dramani Mahama's agenda, it said.
PDS commenced arbitral proceedings at the LCIA against ECG, seeking various claims arising from the termination of the concession agreement.
After a full hearing, the Arbitral Tribunal, in its final award, dismissed all claims sought by PDS.
“We are taking all necessary legal and administrative steps to recover any amounts due to ECG and the State. Our focus is on accountability, transparency, and sustainable reforms in line with President John Dramani Mahama’s energy agenda,” the statement assured.
When contacted, the ministry and ECG could not immediately confirm the amount in question.
Closure
The Ministry of Energy described the ruling as a vindication of the government’s position.
It also added that the ruling brings closure to the long-running dispute and allows the government to focus on rebuilding confidence in the energy sector.
Background
PDS took over management of ECG in 2019 but soon ran into problems after it was discovered that the payment guarantees backing the concession were questionable.
The government terminated the agreement the same year, leading to the loss of a $190 million grant from the US government and widespread controversy.
PDS later initiated arbitration in London, alleging wrongful termination, but the tribunal ruled in favour of the government.
The PDS arrangement was part of the Millennium Challenge Compact II, a partnership between the government of Ghana and the United States aimed at improving the country’s energy sector and ensuring a reliable power supply.
The compact sought to introduce private sector efficiency into electricity distribution through the concession, with PDS expected to invest in infrastructure upgrades and service improvement.
