The Millennium Challenge Corporation (MCC) has, in a letter to Ghana’s Minister of Finance Mr Ken Ofori-Atta, requested the government of Ghana to reinstate the Power Distribution Service (PDS) concession right by 30 October 2019 or risk losing the second tranche allotment of $190 million of the Compact II.
In the letter dated 18 October 2019, the MCC said it wants the government of Ghana to lift the suspension of the LAA, BSA and GSA and cause the Energy Commission to lift the suspension of PDS’ Retail Supply Licence.
The government of Ghana recently terminated the concession deal with PDS regarding the distribution of electricity in Ghana.
A letter dated 18 October 2019 signed by Mr Ofori-Atta, said: “Following consultations with Government, we wish to emphasise that Government remains strongly committed to the Compact and to private sector participation in the Electricity Company of Ghana.
“We also wish to reiterate the position communicated to the CEO of the MCC by the President of Ghana during their meeting on the sidelines of the United Nations General Assembly in New York on September 23rd to the effect that, the current concession had to be terminated in view of the facts uncovered regarding the failure by PDS to satisfy conditions precedent under the relevant transaction documents AND, however, that every effort would be employed to ensure a suitable replacement within the relevant timelines in order to complete the Compact.
“The Government decision to terminate the PDS concession and find a replacement in a timely manner to successfully conclude the Compact is based on two key points: First of all, it is Government’s view that the meeting between the CEO of MCC and the President of Ghana produced an understanding that the existing concession would be discontinued and a concession restoration and restructuring plan executed within existing timelines and in any event before December 31, 2019. It is worth recalling that following this understanding Mr Cairncross and President Akufo-Addo shook hands and committed to expeditiously putting the understandings into effect. Following the meeting, however, MCC sent an implementation plan, which in our opinion did not accurately reflect the outcome of the New York meeting.
“Secondly, the facts detailed below clearly justify the discontinuance of the current concession which, it should once again be emphasised, does not in any way diminish the Government of Ghana’s commitment to private sector participation in Ghana’s energy sector. Indeed, the Government intends to see this PSP through in a manner that respects due process and fidelity to the relevant transaction documents and underlying Compact”.