A new Rocky Mountain Institute (RMI) study, creating a Profitable Balance: Capturing the $110 Billion Africa Power-Sector Opportunity, shows that status quo energy systems could cost African nations up to $180 billion over the next decade, more than 2.5 times the 2016 gross domestic product of Kenya.
If thoughtful action is taken, it is possible to save $110 billion over the next decade — but only through better planning.
On a continent where more than 600 million people lack access to reliable electricity, reform is necessary, so resources are not wasted.
The current project-centered investment approach makes it difficult for governments and development partners to make informed investment decisions. The consequence is often higher energy costs than are necessary, due to costly or poorly aligned investments.
Instead, governments and their partners should focus on developing well-planned electricity systems in which investments in generation and transmission align not only with each other, but also with people’s demand.
“Procuring power is a necessary element of increasing energy access and driving economic development, but it is far from sufficient. Holistic planning and implementation that includes the full range of supply and demand side solutions, their interactions, and critically, productive use programs that allow homes and businesses to realise the full benefits of electricity, is critical,” Eric Wanless, Africa Energy Programme senior director at RMI said.
Two factors were cited as key contributors to capacity imbalance:
A fragmented, project-focused approach that does not consider whole power system dynamics, including bottlenecks in transmission and distribution
Overly optimistic demand forecasts that are not accompanied by strong programs to create productive demand for power
Key recommendations for investors:
Challenge project developers to clearly articulate how their project fits into the overall system need and what steps they are taking to reduce risk in addition to securing government guarantees and/or take-or-pay contracts.
Encourage and support governments in developing a transparent, collaborative and regular planning process if none exists or if those that do exist aren’t informed by on-the-ground realities.
Diversify investments in the power sector to include critical transmission and distribution and enablers of regional trade and integration, and encourage governments to do the same.
The RMI Africa programme currently operates in Ethiopia, Malawi, Nigeria, and Uganda and focuses on increasing access to and the productive use of sustainable electricity. RMI is a nonprofit organization and serves as an unbiased technical advisor to governments, utilities, developers and other energy stakeholders.
Originally published on powerengineeringint.com
A former Chief Executive Officer of Ghana’s national oil company, Ghana National Petroleum Corporation (GNPC), Mr. Alex Mould has questioned the government’s decision to terminate the PDS deal instead of maintaining it and correcting the error associated with it.
In his estimation, not only will Ghana lose the US$190m funding support from Millennium Challenge Corporation(MCC) but also $400m for the Regional Compact, $500 Gov’t Budgetary Support and $580 from the concessionaire all totalling $1.2billion.
He said the government needs to reverse the termination of the transaction (not shareholders) before the country’s economy gets bigger hits than the $2bn of what the country, Ghana, just lost on the Power Compact alone.
In a post titled: ‘My take’, the finance analyst and former CEO of GNPC indicated the West African nation should have opted for the option of MCC to keep PDS.
Below is Mr. Mould’s full postMy TakeGHANA MAY LOSE MORE THAN GHS10bn IF WE DO NOT CONSIDER LIFELINE GIVEN BY MCC
Why should Millennium Challenge Corporation (MCC) allow a grace period to reconduct a tender??
Why on earth are we asking MCC to give a grace period for retendering especially since we have been at this Power Compact for over 5 years??
The goofing was identified in February 2019 when PDS could not come up with the Bank Guarantee just before the deadline of March 1, which surprises me as the international player Meralco could easily get its banks in Philippines to Issue. So why was it left to the local shareholders to raise the guarantees – this was the 1st Red flag!
Assets were handed over in March, 2019 in a rushed manner where CPs were not met. Since April there have been to and fro discussions with MCC. Undue influence by people close to government brought us where we are.
The audit completed over 2 months ago and it was clear that Ghana was duped in handing over the ECG assets mainly due to lack of due diligence by the people in charge of the concessionaire privatization.
There is a Ghana Government Transaction team whom the president has appointed his own lawyer to chair – this team has the most power even more than MiDA and ECG.
There is MiDA that reports to the President. There is the IFC, the adviser to MCC and MiDA.
We are where we are because government failed to take the option proposed by MCC to keep PDS contract (ie to abode by sanity of contract’s doctrine) but change the Shareholding especially of the 51% Local players – who had no proof of competence either financial or technically (to have managed something similar in complexity and magnitude) – and replace them with Ghanaian Institutional shareholder in the interim with the ultimate aim at floating all or some of the shares on the stock exchange.
Government refused!! The question is Why??
Remember Meralco is the only reason that the contract for this ECG concessionaire was awarded to the PDS consortium based on their technical and financial clout which none of the other shareholders – including the recently added AEnergia SA, which still remains a mystery in terms of ownership and why at all its in the consortium – and there is no agent to get rid of them.
Let’s put the blame squarely on Ghana! Let’s call a spade a spade!!
We simply goofed on such a serious transaction!!!
This is a reflection of how serious we take things in our beloved country Ghana – led by our ‘Leaders’ whom we have placed so much ‘Trust’ to do the right things.
The focus is not on Ghana First, but rather what “We” get from managing the assets of the state which normally results in short changing the Citizens of Ghana and to the detriment of our economy.
Please don’t blame MCC! The rules of engagement were clear! MCC are just asking us not to take us back years!!!
Lets consider the option and lifeline given by MCC;
– Keep the PDS contracts
– change the undesired Local shareholder and replace them with institutions like SSNIT and or GIFF
– bring in known world class foreign distribution companies (Meralco has been approved) and eliminate AEnergia SA, the scarlet pimpernel in this deal.
What we lose by cancelling the PDS contract and not working a solution with MCC is not just $190m but nearly $1.7bn
– $190m from the Ghana Power Compact
– $400m for the Regional Compact
– $500m Government Budgetary Support
– $580m from the concessionaire
Restructuring of shareholders is also amendable to MCC. Re-tendering the entire transaction is not.
Government needs to reverse the termination of the transaction (not shareholders) before our economy loses more than the $190m of what we just lost on the Power Compact alone.
The real Question is “ Is Ghana prepared to embarrass US Govt on the international scene??”
It is coming……..watch this space !!
END
Source: www.energynewsafrica.com
Norwegian oil and gas group, Aker Group, in partnership with REV Ocean and the Resource Group (TRG), on Wednesday announced a joint pledge of USD 11 million to three initiatives dedicated to developing disruptive technology solutions for a healthy and productive ocean.
The USD11 million pledge will go towards three initiatives, covering costs for the next three years.
The initiatives include the centre for the Fourth Industrial Revolution (C4IR) in Norway, which will receive USD6 million, the Ocean Data Platform receiving USD3 million, while the Plastic REVolution will also receive USD2 million.
They will contribute towards preserving and sustainably using the ocean and marine resources through strong private sector engagement and technology drivers.
“Throughout its 180-year history, the Aker Group has been a driving force in the development of knowledge-based industry related to ocean resources. All our industrial activities are part of the ocean economy,” Aker President and CEO Øyvind Eriksen commented.
“Today, our ocean is at risk and changes are needed. I strongly believe that solutions for the ocean are developed more robustly and swiftly if businesses like Aker joins forces with governments, NGOs and other stakeholders. A healthier ocean is a shared interest,” he added.
On his part, Nina Jensen who is the CEO of REV Ocean said: “We will create disruptive technology solutions for Our Ocean, starting with gathering and sharing facts. The Ocean Data Platform, launched yesterday, will gather and liberate data, enabling solutions and people – for one healthy ocean.
“Secondly, we will unite the right people. In the technology centre for the Ocean, we invite the public and private partners to create collaborative solutions for the environment. And lastly, we translate ideas into action, through initiatives such as the Plastic REVolution Foundation, which was created to develop commercially viable and scalable solutions to fight plastic pollution.”
About The Three Initiatives:
The Affiliated Centre for the Fourth Industrial Revolution in Norway (C4IR Norway) is being developed by the Aker Group and TRG’s philanthropic initiatives.
Focusing on the ocean health and wealth, it will be the only center in the World Economic Forum’s C4IR Network that is dedicated to the environment. The Centre will cooperate with the business community, research institutions, and in close dialogue with the government of Norway, the High-Level Panel for a Sustainable Ocean Economy and others to design and pilot technology solutions and innovative policy frameworks.
The center, which will be a non-profit foundation, aims to take a global leadership role in environmental innovation for the ocean leveraging on emerging 4IR technologies.
The Ocean Data Platform (ODP) is being developed by the Ocean Data Foundation, a philanthropic initiative by Kjell Inge Røkke, in close cooperation with REV Ocean.
The ODP aims to liberate ocean data and connect people, data and technology to drive an ocean sustainability movement.
The platform enables the entire ocean community such as academia, business and Ocean policy /management to collaborate and share data for one healthy ocean by offering digital tools and services with easy access to data, immersive visualisation, and Artificial Intelligence (AI) tools.
The Plastic REVolution Foundation is a philanthropic entity founded by Kjell Inge Røkke. It works closely with REV Ocean.
It is created to develop commercially viable and scalable solutions to fight plastic pollution.
The Foundation’s initial project is a plastic-to-liquid chemical recycling plant in Accra, Ghana, coupled with plastic waste collection systems.
Source: www.energynewsafrica.com
A former President of the Republic of Ghana, Mr. John Dramani Mahama, has expressed his disappointment in the Akufo-Addo led administration over its decision to terminate the concessionaire agreement signed between Electricity Company of Ghana (ECG) and Meralco led Power Distribution Services (PDS) Ghana Limited.
The John Dramani Mahama led National Democratic Congress administration signed the Ghana Power Compact II with Millennium Challenge Corporation(MCC) in 2014 to introduce Private Sector Participation in the distribution business of ECG.
In a post on his Facebook timeline, Mr Mahama indicated that the PDS termination was needless and could have been avoided by government.
He stated, “… a decision by the MCC [Millennium Challenge Corporation] to withdraw $190 million from the Compact funding. It’s a sad day for us all. This money was meant to improve the efficiency of our electricity utility corporation.”
“Let me emphasise that, all these shady happenings were avoidable if the right decisions, with the future development of Ghana in mind, were taken, and not parochial decisions that reflect the sad and worsening situation of state capture that we are experiencing under Akufo-Addo,” the post read further.
Mr. Seth Terkper(left) , Ghana’s former Minister for Finance in a hand shake with an official of MCC during the signing ceremony of the Ghana Power Compact II in 2014Background
Government late last week announced its intention to terminate the PDS Contract, months after it claimed that it had detected fundamental and material breeches in the PDS deal.
The termination follows a meeting between Nana Bediatuo Asante, Secretary to President Akufo-Addo, and Ken Ofori-Atta, the Finance Minister on one hand, and Kyeh Kim, Principal Deputy Vice President of MCC, and Kenneth Miller, the Resident Country Director-Ghana of the MCC, on the other hand, held in Washington DC on Friday, October 18, 2019.
Critics have chastised Government for not acting in the best interest of Ghana in the negotiation, and signing of the power concession.
But Information Minister, Kojo Oppong Nkrumah, briefing journalists in Accra on Wednesday, October 23, said the Government of Ghana has never been negligent.
According to him, the Government of Ghana has at all times worked with Millennium Challenge Corporation (MCC) in structuring this transaction in the best interest of Ghanaians.
Read below Mahama’s full post.
Soon, I will be sharing my position on the state of our struggling nation with the good people of Ghana. But allow me to say that as someone who took over from President JEA Mills of blessed memory and the Ghana Compact 2 negotiations with the Millennium Challenge Corporation and the US Government, I am deeply disappointed in Nana Akufo-Addo for his handling of the Compact.
Fellow Ghanaians, we are all deeply disappointed because of the self-serving decisions that were taken, the deliberate acts perpetuated with the crude support of the Flagstaff House in the ECG Concessionaire Agreement that has led us to where we are today. This was absolutely needless and could have been avoided.
I have just noted a decision by the MCC to withdraw $190 million from the Compact funding. It’s a sad day for us all. This money was meant to improve the efficiency of our electricity utility corporation.
Let me emphasise that, all these shady happenings were avoidable if the right decisions, with the future development of Ghana in mind, were taken, and not parochial decisions that reflect the sad and worsening situation of state capture that we are experiencing under Akufo-Addo.
Source:www.energynewsafrica.com
Joint Stock Company Rosgeo and the Ministry of Mines and Hydrocarbons of the Republic of Equatorial Guinea have signed a Memorandum of Understanding during the Russia-Africa Summit in Sochi, Russia.
Sergey Gorkov, Director General and Chairman of the Board of Rosgeo, and H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, signed the document.
“Rosgeo’s subsidiary JSC Zarubezhgeologia successfully operated in Equatorial Guinea in the 1970s already, and formed the basis for the country’s geological exploration industry,” Rosgeo’s head Sergey Gorkov said in a statement copied to energynewsafrica.com.
“The MoU signed today gives us opportunities for long-term cooperation in geological exploration.”
“Rosgeo’s return to Equatorial Guinea under this cooperation agreement will materially improve our understanding of the country’s subsurface, unlocking new prospectivity and boosting our oil and gas reserves. It will also be a game changer for our nascent mining industry,” H.E. Gabriel Mbaga Obiang Lima.
In accordance with the signed document, the parties will cooperate mainly in airborne geophysical operations, 2D and 3D regional seismic survey in transit and deep water offshore zones, but also in the processing and interpreting of seismic data (including gravity and magnetic survey, electrochemical and geochemical studies), engineering studies and other works.
French oil company Total has exercised a one-year option on the existing contract for the Vantage Drilling-owned jack-up rig Emerald Driller in Qatar.
The one-year option will start in direct continuation during 2Q 2020 and includes an additional option year, Vantage said on Tuesday,
The rig owner signed the previous two –year extension for the Emerald Driller back in November 2017.
Ihab Toma, Vantage CEO, commented: “The Emerald Driller has performed superbly for Total Qatar and we are delighted with their confidence in Vantage and the Emerald Driller to work on some of their most extreme wells.”
According to Bassoe Offshore, the rig’s day rate under the new option will be $80,000. The option starts on June 1, 2020, and expires on June 1, 2021.
The Emerald Driller rig, of a Baker Marine Pacific Class 375, was built by PPL Shipyard in 2008.
Norwegian engineering company Aker Solutions aims to generate about half of its revenue from renewable or distinct low carbon solutions by 2030, according to the company’s 20/25/30 strategy.
In a statement on Wednesday, Aker Solutions said the oil and gas industry would remain Aker Solutions’ biggest market, but over the next decade the company would have a more balanced portfolio of products and technologies that either generate renewable energy or removes or substantially reduces CO2 emissions.
“The world will continue to see rising energy demand and the challenge for our industry is the need to deliver this with a significantly lower carbon emissions,” said Luis Araujo, chief executive officer of Aker Solutions.
According to the company, in all forward-looking scenarios, the industry will need to provide more energy, with a lower carbon footprint.
The pace of the energy transition will be dictated by a number of drivers, such as electrification, efficiency gains, low-emission fuels and accelerated cost reductions of renewables. Still, demand for oil and gas is expected to grow over the next decade, although not as fast as the expected growth in renewable energy, Aker Solutions said.
In its updated enterprise strategy, Aker Solutions set out its growth ambitions within the energy industry and beyond. The company aims to derive 20 percent of its revenue from renewable energy and 25 percent from distinct low-carbon solutions by the year 2030.
The renewable energy solutions will primarily come from floating wind while the low carbon segment is a set portfolio of existing Aker Solutions offerings, including: carbon capture, utilization and storage (CCUS), subsea gas compression, electrification of production assets and unmanned platforms.
Aker Solutions noted it had developed and invested in renewable energy and low carbon solutions for many years.
The company has delivered or is involved in several projects in these segments.
Renewable Energy
Namely, Aker Solutions has taken a 23 percent stake in Principle Power, which has a proven concept for floating wind and is currently installing the WindFloat Atlantic project.
The company is involved in major wind farm developments in the US and South Korea.
Low Carbon Solutions
CCUS – Aker Solutions has developed CCUS since delivering the Sleipner storage solution in 1996. Today, the company is well positioned to realize the first industry-scale carbon capture facility at a cement plant with Norcem Heidelberg in Norway.
Aker Solutions is also delivering its modular Just Catch plant to a waste-to-energy plant in the Netherlands, where the CO2 will be utilized as a fertilizer.
Finally, the company is deploying its subsea expertise in the Northern Lights CO2 storage project in the North Sea.
Subsea Gas Compression – Aker Solutions delivered the world’s first subsea gas compression system to Equinor’s Åsgard field in 2015. The company is currently involved in developing the first subsea gas compression project outside Norway, at the Jansz-Io field for Chevron in Australia.
Electrification – Low emission power from shore to Johan Sverdrup and Gina Krogh can generate CO2 emissions savings equivalent to removing 150,000 cars annually. Aker Solutions is involved in several studies for the electrification of fields.
“Growth in segments such as renewables and CCUS increases the addressable market for Aker Solutions,” said Araujo.
“Our ambition is to become the recognized leader in low carbon offerings and sustainable solutions. We will achieve this through realizing our long-term ambition of 20/25/30.”
Canadian energy giant Husky Energy Inc. (OTCMKTS: HUSKF) has cut staff in a round of layoffs, the company announced on Tuesday.
The layoffs, thought to have affected over a hundred workers, have mostly affected workers in Calgary, where workers filed out of company headquarters to a row of cabs waiting to cart off workers who had been dismissed.
The layoffs are in line, Husky said, with its annual capital spending goals, which Husky lowered by 10% this year to $3.15 billion.
“Today we did have to say goodbye to some of our colleagues. Husky has been taking steps to better align the organization and workforce with our capital plan and strategy,” Husky Spokesperson Kim Guttormson said in an emailed statement.
Husky declined to comment on the number of those laid off.
The timing of the layoffs coincides with federal elections earlier this week, where results were not the most favorable outcome for the oil and gas industry that fears it will suffer under Trudeau’s rule now that he must enlist the help of anti-oil parties.
Husky has already felt the pinch from the oil production curtailments that it was required to implement when the price of WCS was significantly lower than that of WTI due to constrained takeaway capacity as Canada struggled to approve and build new oil pipelines—a challenge that Canada still faces today.
Husky’s share price was trading up 3.02% by Tuesday afternoon, at $7.26 per share, with just two days to go until Husky’s Q3 report is released on Thursday.
Husky Energy’s largest shareholder (69%), which is controlled by Hong Kong billionaire Li Ka-shing, has lost an estimated $20 billion from its Husky investment since 2008, and Husky’s cashflows were negative for Q2 2019.
Ghana’s bulk power trading company, Electricity Company of Ghana (ECG), has assumed full operations of power distribution in the southern sector of the West African nation, following the government’s decision to terminate the concession agreement between Power Distribution Services Ghana Limited (PDS) and ECG.
A press statement issued by the ECG stated that “Consequently, all activities which were hitherto undertaken by PDS have reverted to ECG.”
“ECG has, therefore, assumed full operational and financial control of the electricity distribution business in the Southern Zone of Ghana with immediate effect,” the release said.PRESS RELEASE
23RD OCTOBER, 2019
TERMINATION OF PRIVATE SECTOR PARTICIPATION TRANSACTION AGREEMENTS BETWEEN ELECTRICITY
COMPANY OF GHANA LTD (ECG) AND POWER DISTRIBUTION SERVICES GHANA LTD (PDS)
The Electricity Company of Ghana Limited (ECG) has today, 23rd October, 2019 terminated Private Sector
Participation Transaction Agreements with Power Distribution Services Ghana Limited (PDS).
ECG has therefore assumed full operational and financial control of the electricity distribution business in the Southern Zone of Ghana with immediate effect. Consequently, all activities which were hitherto undertaken by PDS have reverted to ECG.
All stakeholders and customers should therefore engage ECG in their normal business activities which include but are not limited to the following:
• Metering
• Billing
• Distribution of bills
• Bill reconciliation
• Revenue collection
• New Service connections
• Disconnections and reconnections
• Faulty meter replacements
• Network faults and repairs
• Network Operations, Maintenance, Expansion and Rehabilitation.
• Complaints and fault reporting to the call centres
• Any other related services
In this regard, all payments in respect of power purchases and other related activities should take place at:
• ECG Regional and District Offices
• ECG existing Customer Service Centres
• ECG licensed vending stations
• ECG operated Cash Points
• ECG authorised Banks
Accordingly, all cheques issued in respect of power purchases and other related activities should be in the sole name of Electricity Company of Ghana Limited.
All assets currently in the name of PDS revert to ECG with immediate effect and will be rebranded in
accordance with the decision over the next few weeks.
ECG will continue to provide quality electricity services to our cherished customers and stakeholders.
All enquiries should be directed to ECG Call Centre No. 0302611611 and existing social media handles.
END
ECG, THE NAME BEHIND POWER DISTRIBUTION IN GHANA
ISSUED BY: PUBLIC. RELATIONS AND COMMUNICATIONS DIVISION, ECG.
The US government has withdrawn a $190 million it granted to the West African nation, Republic of Ghana, due to what it described as the unwarranted termination of the concession agreement between the Power Distribution Services (PDS) Ghana Limited and Electricity Company of Ghana (ECG).
A statement from the US Embassy on Tuesday, October 22, 2019, said the Millennium Challenge Corporation (MCC) has confirmed that the money is no longer available after Ghana decided to terminate the concession agreement with the PDS.
The money was available upon a successfully executed concession agreement, the statement said.
“Based upon the conclusions of the independent forensic investigation, the U.S. position is that the transfer of operations, maintenance, and management of the Southern Distribution Network to the private concessionaire on March 1, 2019, was valid and, therefore, the termination is unwarranted,” the US said.
However, the Government of Ghana, decided to terminate the agreement over material and fundamental breaches from the PDS.
Al-Koot, a Qatari company which the PDS submitted as the ones who issued the demand guarantees, denied doing so, thus, raising concerns of fraud.
After an initial suspension of PDS, the government, in a letter to the MCC, said it had decided to terminate the agreement with the PDS.
Ghana’s Finance Minister, Ken Ofori Atta, however, told the MCC Ghana would want to replace the PDS by a restrictive tendering.
Statement from the Embassy of the United States of America
Regarding the Termination of the Private Sector Concession by the Government of Ghana under the Millennium Challenge Corporation Power Investment
Accra, GHANA— On October 19, 2019, the Government of Ghana (GoG) informed the Millennium Challenge Corporation (MCC) in Washington, D.C. of its decision to terminate the concession agreement between Electricity Company of Ghana (ECG) and private operator Power Distribution Services Ghana Ltd (PDS).
The United States of America notes this decision with regret. Based upon the conclusions of the independent forensic investigation, the U.S. position is that the transfer of operations, maintenance, and management of the Southern Distribution Network to the private concessionaire on March 1, 2019, was valid, and therefore the termination is unwarranted. As such, MCC has confirmed that the $190 million funds granted to Ghana at the March 1 transfer to the 20-year concession from ECG to PDS are no longer available.
The United States underscores the importance of contract sanctity as essential to a conducive investment climate and a pre-condition for inclusive economic growth. In this spirit, the United States has worked with the Government of Ghana since the latter’s July 30 suspension of the concession in the hopes of finding a mutually acceptable solution that respected contract sanctity and the Government of Ghana’s interest in restructuring the concession.
Moving forward, the U.S. Government, through MCC, will continue to implement the Tranche I funds of $308 million with the Millennium Development Authority (MiDA). This funding will continue to support important improvements to the infrastructure of Ghana’s southern distribution network, increase reliability and power access to key markets, and advance energy efficiency programs directly benefiting the people of Ghana.
The U.S. Government is a committed partner and has full confidence in MiDA to lead the joint effort to deliver the projects funded through the $308 million remaining under the MCC Ghana Power Compact. The U.S. Government looks forward to continuing to work together with MiDA and the Government of Ghana to implement the remainder of the Power Compact.
Background:
On March 1, 2019, Ghana Power Distribution Services, Ltd. (PDS) assumed operation and management of the staff and assets of the Electricity Company of Ghana (ECG) under a 20-year concession agreement. Private sector participation is a central reform under MCC’s Ghana Power Compact. This is critical to the long-term sustainability of related infrastructure investments and the financial recovery of the energy sector in Ghana.
The Compact comprised two tranches of funding: $308 million available upon the official start of the current Compact, and a second tranche of $190 million, which was available upon a successfully executed concession agreement, which the United States maintains occurred on March 1, 2019.
The US government has expressed its confidence in the Millennium Development Authority (MiDA), an implementing agency for the Millennium Challenge Corporation’s (MCC) Power Compact II in the Republic of Ghana, West Africa.
MiDA has come under public scrutiny following what some say its ‘poor supervision’ of the concession agreement signed between the Electricity Company of Ghana (ECG) and Meralco-led Power Distribution Services (PDS) Ghana Limited.
Some members of the Ghanaian public including think tanks, demanded that officials of MiDA, who supervised the agreement, are made to resign.
Despite MCC’s letter on October 18, 2019, demanding that the PDS is reinstated by the end of October 30, 2019, President Akufo-Addo’s administration has gone ahead to declare its decision to terminate the agreement.
However, in a statement issued by the US Embassy in Ghana, it said: “The U.S. Government is a committed partner and has full confidence in MiDA to lead the joint effort to deliver the projects funded through the US$308 million remaining under the MCC Ghana Power Compact. The U.S. Government looks forward to continuing to work together with MiDA and the Government of Ghana to implement the remainder of the Power Compact.”
Full statement of US Embassy
Accra, GHANA— On October 19, 2019, the Government of Ghana (GoG) informed the Millennium Challenge Corporation (MCC) in Washington, D.C. of its decision to terminate the concession agreement between the Electricity Company of Ghana (ECG) and private operator Power Distribution Services Ghana Ltd (PDS).
The United States of America noted this decision with regret. Based upon the conclusions of the independent forensic investigation, the U.S. position is that the transfer of operations, maintenance, and management of the Southern Distribution Network to the private concessionaire on March 1, 2019, was valid, and, therefore, the termination is unwarranted.
As such, MCC has confirmed that the $190 million funds granted to Ghana at the March 1 transfer to the 20-year concession from ECG to PDS are no longer available.
The United States underscores the importance of contract sanctity as essential to a conducive investment climate and a pre-condition for inclusive economic growth.
In this spirit, the United States has worked with the Government of Ghana since the latter’s July 30 suspension of the concession, in the hopes of finding a mutually acceptable solution that respected contract sanctity and the Government of Ghana’s interest in restructuring the concession.
Moving forward, the U.S. Government, through MCC, will continue to implement the Tranche I funds of $308 million with the Millennium Development Authority (MiDA).
This funding will continue to support important improvements to the infrastructure of Ghana’s southern distribution network, increase reliability and power access to key markets, and advance energy efficiency programmes directly benefiting the people of Ghana.
The U.S. Government is a committed partner and has full confidence in MiDA to lead the joint effort to deliver the projects funded through the $308 million remaining under the MCC Ghana Power Compact. The U.S. Government looks forward to continuing to work together with MiDA and the Government of Ghana to implement the remainder of the Power Compact.
Background:
On March 1, 2019, Ghana Power Distribution Services, Ltd (PDS) assumed operation and management of the staff and assets of the Electricity Company of Ghana (ECG) under a 20-year concession agreement. Private sector participation is a central reform under MCC’s Ghana Power Compact. This is critical to the long-term sustainability of related infrastructure investments and the financial recovery of the energy sector in Ghana.
The Compact comprised two tranches of funding: $308 million available upon the official start of the current Compact, and a second tranche of $190 million, which was available upon a successfully executed concession agreement, which the United States maintains occurred on March 1, 2019.
A former Minister of Power and Petroleum in the Republic of Ghana, Hon. Emmanuel Armah Kofi Buah is predicting of a possible power crisis in the West African country, as a result of government decision to terminate PDS deal.
“The NPP government has messed up the deal which was beautifully started by the NDC government,” he said.
“But the way things are being handled by the NPP government over this PDS deal will cause the country a great deal of mess if they do not obey and work things out properly with the authorities of the Millennium Challenge Corporation.”
He added that the country had already expended the 500 million dollars provided by the MCC for the power sector.
However, the Deputy Minister of Energy in charge of Power, William Owuraku Aidoo, has suggested that the controversial PDS deal has not been canceled.
Speaking on an Accra based Peace FM, the Deputy Minister who doubles as the Member of Parliament for Afigya Kwabre South constituency said, “it’s a letter of intent . . . you can’t just get up and cancel, you need to consult all the stakeholders.”
A letter dated 18 October 2019 signed by Finance Minister Ken Ofori-Atta indicated that the deal has been 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.”
According to the statement, “following consultations with Government, we wish to emphasize that the 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 5th edition of Africa Oil Governance Summit has opened in Accra, the capital of Ghana, West Africa.
The Deputy Minister of Energy in-charge of Petroleum Dr. Mohammed Amin Adam opened the two-day summit, being organised by the Africa Centre for Energy Policy (ACEP), and under the theme: ‘Optimising Oil and Gas Resources in Africa: The Role of New Discoveries in the continent’s Development Agenda’.
The Summit has brought together oil and gas players in Ghana and other parts of Africa.
The objectives of the Summit are to encourage alignment of Africa’s petroleum resource exploitation with the development of the continent and its people, as well as provide the platform for regional consensus building on strategies that must be adopted to promote regional planning for the utilisation of oil and gas resources.Source:www.energynewsafrica.com
It has emerged that Millennium Challenge Corporation (MCC), a US agency which is providing funding for Ghana’s Power Compact II, has demanded that the President Akufo-Addo-administration reinstate the suspended Power Distribution Services (PDS) Company by October 30, 2019, energynewsafrica.com can confirm.
The MCC’s demand follows a discussion between officials of Government of Ghana and the MCC in New York in September 22-24, 2019 and Washington DC on October 15-18, 2019.
In a letter signed by the Acting Vice President of the Department of Compact Operations for the Millenium Challenge Corporation (MCC), Kyeh Kim, it said: “Government of Ghana formally announcing the reinstatement of PDS concession right under the transaction arrangements – (deadline 30th October 2019), Lift the suspension (lease and assignment agreement, the bulk supply agreement and the government support agreement) sanctions on all three, Cause the energy commission to lift the suspension of PDS retail supplier license.”
The MCC’s letter also demanded an immediate reversal of the ban placed on PDS by the Energy Commission.
The letter, which is said to be a direct response to the Finance Minister, Ken Ofori Atta’s statement on October 18, further ordered the government to authorise the resumption of PDS’ activities as stipulated by the compact agreement.
Source:www.energynewsafrica.com
