PDS touts achievements in 4 months

Power Distribution Services (PDS) Ghana Limited has listed a number of operational improvements realised in the first four months of its operations in the Southern Distribution Zone.

GH?3.3bn ECG debt reduced by over GH?1bn

The company said Electricity Company of Ghana's (ECG) outstanding debt of about GH?3.3 billion, which has been increasing steadily over the past three years, has been reduced by over GH?1 billion.

The feat, which PDS has achieved in five months of operations, has been described as unprecedented.

Revenue collection up by 4.87%

In a document detailing the performance of PDS so far, the company said revenue collection has also increased by 4.87% to GH?1.86 billion from March to June 2019, compared to GH?1.773 billion the same period last year.

5.29% rise in power purchase

The document, titled PDS Operating Performance, March-July 2019, said power purchased by PDS increased by 5.29% to 3,877 GWh, compared to 3,692 GWh the same period last year when it was still under ECG.

Energy sales rise by 1.32%

Similarly, it said energy sales (in GWh) increased by 1.32% to 2,934 GWh, compared to 2,859 GWh the same period last year.

“It is also during this period when it was discovered that energy sales are being affected by a negative energy sale caused by excessive bill estimation, thwarting any supposed growth as a result of increased power purchased by PDS,” it added.

20.5% drop in power outages

The average number of power outages a customer experienced from March to June 2019 is 18.43 times, a 20.5% improvement over the same period in 2018, where the average number of power outages a customer experienced was 23.17, representing five more power outages.

30.6% drop in duration of power outages

The average duration of power outage a customer experienced from March to June 2019 is 17.26 hours, a 30.6% improvement over the same period in 2018, where the average duration of power outage a customer experienced was 24.87, an additional eight hours of power outage.

PDS Demand Guarantees probe

The report of an investigation launched after government said it detected fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction is yet to be made public.

PDS suspended, ECG in charge

Following the revelation, government suspended the concession agreement with PDS and tasked ECG to be in full control of power distribution pending the outcome of investigations.

PDS to invest $580m

PDS announced plans to invest over $580 million in Ghana’s power sector within the next five years after receiving the assets and operations of ECG.

20-Year concession

For the next 20 years, PDS is the electricity service provider in all of ECG’s operational areas in the Southern Distribution Zone of Ghana – the Greater Accra, Eastern, Volta, Central and Western regions.

ECG’s assets were on March 1, 2019 leased to PDS the Concessionaire while ECG became an Asset Holding Company, and after the end of the concession, all assets would be transferred back to it.

$498 million from MCC agreement

The Millennium Challenge Corporation (MCC) is investing $498 million into the power sector to improve electricity reliability, access, affordability and efficiency under the Ghana Power Compact II.

Targets for PDS

PDS is expected to strengthen the governance, management and operations of ECG and improve the delivery of power to end-users, as well as support the country’s socio-economic growth and alleviate poverty.

The ECG Private Sector Participation (PSP) Activity is one of the key project activities that constitute the ECG Financial and Operational Turnaround (EFOT) Project under the $498.2 million Ghana Power Compact programme.

PDS has distribution and sales licences, but the distribution licence was withdrawn by the Energy Commission following the suspension.

The two licences would enable the PDS and Meralco Consortium to operate the wires of ECG and supply power from bulk supply points to homes and electricity consumers, as well as collect bills from power consumers.

The power distribution and sales licences are valid for 20 years, but after five years of operation, other corporate entities would be licensed to engage in the sale of power in the country.

ECG has power brokerage and export licences

The management of ECG also received power brokerage and export licences to supply bulk power to PDS and Meralco Consortium, and to also sell electricity to neighbouring West African countries.

Ghana signs MCC Agreement

On August 5, 2014, Ghana signed a five-year Power Compact with the Millennium Challenge Corporation (MCC), a United States of America government agency.

Under the agreement, Ghana would utilise a $498.2 million grant, provided by the MCC, to undertake reforms and infrastructural projects aimed at addressing the inefficiencies in the power sector and meet the increasing demand of power by industries and domestic users.

Key stakeholders, including the Energy Commission, ECG, Public Utilities Regulatory Commission, and other state actors, collaborated to design the ECG PSP Transaction, culminating in the birth of PDS Ghana Limited as the acceptable private sector participation provider.

The Millennium Development Authority (MiDA) was tasked to select a competent and viable company to take over ECG. On April 10, 2018, MiDA selected Meralco Consortium from Philippines as the winner of the ECG PSP, out of six bidders, after a competitive bidding process to partner PDS Ghana Limited.

PDS shareholders

PDS Ghana Limited comprises AEnergia SA, an Angolan company, and three Ghanaian firms – TG Energy Solutions Ghana Limited, Santa Power Limited and GTS Power limited, which have 51 per cent shareholding, while Meralco Consortium owns 49 per cent.