ECG-PDS arrangements should be re-considered – IES Executive Director

Nana Amoasi VII, the Executive Director of the Institute for Energy Security (IES) has proposed that the arrangement the Electricity Company of Ghana (ECG) had with Power Distribution Services (PDS) Limited some years back before its termination should be re-considered.

It would be recalled that the government of Ghana terminated the concession agreement with the Power Distribution Services (PDS) Limited over the take-over of the assets of the Electricity Company of Ghana (ECG), for the distribution of electricity in the southern sector of the country.

The move was necessitated by a forensic audit conducted by the Millennium Challenge Corporation (MCC) and the government’s investigations into the issuance of demand guarantees for the concession transaction, which revealed that the payment security for the transaction was invalid.

Reacting to the concern raised by the Public Utilities Regulatory Commission (PURC) of ECG being on the verge of bankruptcy, Nana Amoasi asked that the old agreements between ECG and PDS be considered.

However, he said the agreements must be re-accessed to avoid any form of risk and give a solution to the pending problem.

“All possible forms of private sector participation can be considered but we must re-access the situation again because things have worsened since we introduced the PDS-ECG arrangements. So, we should re-access and make sure that we take the right risk assessments and to get a fair solution to that” he said during an interview on Ghana Tonight.

According to him, this concession between ECG and PDS would have been a solution to these challenges being faced by the ECG.

He emphasised that it is imperative to leverage the private sector because they do not only expect but also bring the needed funding.

Nana Amoasi said that the PDS arrangements were going to introduce some expectations, billing, and management but unfortunately, some shady arrangements caused the dissolution of the arrangement.

In the late hours of Wednesday, the Public Utilities Regulatory Commission (PURC) issued a stark warning through a letter about the precarious financial state of the Electricity Company of Ghana (ECG), raising concerns about the possibility of bankruptcy.

In a letter addressed to the Presidency, the Ministers of Energy and Finance, and other key stakeholders, PURC’s Executive Secretary, Dr. Ismael Ackah, outlined the severe challenges facing not just ECG, but also the Volta River Authority (VRA), Ghana Grid Company (GRIDCo), and the Bui Power Authority.

Dr. Ackah highlighted that ECG’s financial difficulties have led to delays in salary payments and struggles to cover administrative costs, emphasizing the urgency for swift and decisive action.

According to the letter, although ECG had been facing these problems over the years, the situation worsened further in August 2024, with revenues dropping below GH¢ 800 million, representing just 42% of the necessary funds to pay sector players.