Ghana’s Minister for Energy, John Peter Amewu, has called for constructive energy planning practices in the medium to long term, to ensure that Ghanaians are not burdened with the cost of excess energy supply.
According to him, the current high cost of energy for Ghanaian households and businesses is as a result of the excess energy capacity in the system which Ghanaians have to pay for whether the power is used or not.
His comments come at a time the government is engaging with Independent Power Producers (IPP) and Gas Suppliers (GS) to reassess all take or pay contracts and as well as resolve other energy-related issues.
Ghana currently has an installed power generation capacity of 5,083 MW, a dependable capacity of 4, 593 MW, and a peak demand of around 2,700 MW.
In effect, Ghana’s installed capacity is almost double its peak demand. Moreover, with current tariffs not at full cost recovery for power and gas, the 2019 sector shortfall is expected to grow to approximately USD$1.3 billion, and without urgent Government action, the sector shortfall will continue to increase and accumulate to more than USD$12.5 billion (more than 25% of 2017 GDP) by 2023.
Delivering the keynote address at the 2019 edition of the Ghana Energy Awards, John Peter Amewu said all steps must be taken to protect Ghanaians from any unnecessary costs in the energy sector.
“As a country, we should begin to decide whether we want to wait for demand to meet supply or to create supply in excess for demand to grow and meet. Any country that refuses to undertake constructive energy planning practices, will always create excess supply where the cost of socialization will be borne by Ghanaians.”
He went on to mention that his Ministry was committed to putting in place systems to ensure that going forward excess energy capacity is only added at a sustainable rate.
“While there are steps being taken to make sure that going forward as a country we would be mindful of our generation, transmission, distribution, supply, and metering analysis, we at the Ministry have begun to put in measures and policies that will make sure that we bring in generation at the time that demand begins to grow.”
Gridworks, the company set up in 2019 to develop and invest in Africa’s electricity networks, has announced the financial close of its investment in Mettle Solar Investments (Mettle).
Mettle is a South African-based commercial and industrial (C&I) solar power company that provides energy solutions to business customers across Africa. Mettle will receive R106.7 million ($7.2 million) of equity funding from Gridworks.
The investment by Gridworks will also see Mettle appoint Mbuvi Ngunze as its new Chairman. Ngunze is an experienced African business leader, who is currently a senior advisor to Catalyst Principal Partners and was previously the Group MD and CEO of Kenya Airways.
Mettle currently has 34 projects (28.1MW) in operation in South Africa, Namibia, Kenya and Indian Ocean islands with a further 2.3MW currently under construction. It works with business clients to fund, develop and operate solar power technologies, including battery storage, that provide consistent, affordable clean energy.
Gridworks’ investment, its first since launching in June 2019, will help drive Mettle into new markets across Africa.
The investment aims to reduce carbon emissions and demonstrate the commercial viability of C&I systems for businesses in a continent where 70% of total energy demand currently comes from commercial and industrial customers.
Welcoming the financial close of the investment, Gridworks CEO, Simon Hodson said: “This is a landmark for Gridworks as our first investment reaches financial close. By providing patient, long-term capital to Mettle we’ll support them as they reach new markets across Africa. Mettle offers consistent and clean energy to their customers, acting as a pioneer in the use of battery storage for business users and helping them cut their dependence on diesel.
“Our aim is to increase the quantity and quality of power in Africa and we know that Mettle can contribute to this goal – providing green, reliable power to businesses that will go on to create jobs and economic opportunity. Mettle’s excellent leadership team will be strengthened by the appointment of the hugely experienced Mbuvi Ngunze as its new Chairman.”
Ngunze also commented: “I am delighted to be joining the Board of Mettle at this important time in the company’s development. There’s a clear need for a reliable power supply to business across Africa, with the continent’s commercial and industrial customers crying out for stable, affordable green energy.
“With the new investment announced today by Gridworks, I believe that Mettle can expand into new African markets, meeting the growing needs of businesses, while helping to combat climate change. I look forward to playing my part in that growth.”
Capitalised by development financial institution CDC, Gridworks will aim to invest over $300 million improving the transmission and distribution infrastructure to deliver reliable and sustainable power.
About seven states of in Nigeria the West African nation, Nigeria, will soon see an improvement in their electricity supply.
The seven states are Kano, Kaduna, Delta, Edo, Anambra, Imo, and Abia.
This is because the board of directors of the African Development Bank Group has approved a $210 million financing package to the Federal Republic of Nigeria for the Nigeria Transmission Expansion Project (NTEP1), which seeks to rehabilitate and upgrade the nation’s power lines and improve distribution and supply.
Executed by the Transmission Company of Nigeria, NTEP1 is part of a $1.6 billion Transmission Rehabilitation and Expansion Programme (TREP).
“Nigerians and their businesses spend $14 billion annually on inefficient and expensive petrol or diesel-powered generators. This project will contribute significantly to the reduction of Nigeria’s power deficit, decrease air and noise pollution and reduce the cost of doing business,” Ebrima Faal, the Bank’s Senior Director for Nigeria in a story published by Esi-Africa.com.
The Bank’s financing, comprising a $160 million loan, and an additional $50 million loan from the Africa Growing Together Fund, will support construction of 330kV double circuit quad transmission lines and substations across the country.
The project will upgrade existing 263 km of 330kV lines, while adding an additional 204 km of new lines to increase TCN’s wheeling capacity, stabilise the grid and reduce transmission losses.
Upon completion, the project will significantly improve Nigerian transmission grid, and directly impact the economy, industries, businesses and the quality of life of Nigerians.
The project will also reduce the use of small-scale diesel generators and therefore contribute to the reduction of GHG emissions by saving approximately 11,460kt CO2 per year.
The project will create about 2,000 direct jobs – 1,500 during construction and 500 during operations –especially for youth: 30% of these jobs are expected to be taken by women.
By increasing electricity supplies to Small and Medium Enterprises, the project will foster the creation of additional indirect jobs.
Wale Shonibare, the Bank’s Acting Vice-President for Power & Energy said implementation of the project would increase evacuation capacity from the south of the country towards the north, where power supply is limited.
“NTEP1 will increase the grid transmission stability and capacity, and reduce the amount of stranded power, whilst improving power export and regional power system integration to the West African Power pool, especially through Niger and Benin interconnections,” he said.
Highlighting the project’s contribution to regional integration efforts, Batchi Baldeh, the Bank’s Director for Power Systems Development said it would benefit from the Bank’s expertise and proven track record in leading the development of power grids across the continent, notably in West Africa, with many successful operations supporting the implementation of interconnectors.
“In line with our work to improve utility performance, NTEP1 will substantially strengthen the capacity of TCN with regards to the development of energy infrastructure projects, especially the adoption of modern and more efficient transmission technologies, which are most required in Nigeria for network improvements,” Baldeh said.
Hundreds of workers of Ghana Grid Company (GRIDCo), a power transmission company in the Republic of Ghana, West Africa have hit the streets of Accra to protest against ECG, VALCO and NEDCo for failing to settle their huge indebtedness which they say has crippled the power transmission company.
The agitated staff of GRIDCo massed up at the Black Star Square on Tuesday morning to begin their protest march to the Finance Ministry and the Electricity Company of Ghana (ECG).
GRIDCO leadership has been pushing for millions of debts owed it by Electricity Company of Ghana, the Northern Electricity Distribution Company (NEDCo) and the Volta Aluminum Company (VALCo) to be settled.
Clad in red and black attires, protestors brandished placards to drum home their concerns.
Angry GRIDCo staff say as of March 1, 2019, ECG’s outstanding debt to GRIDCo stood at GH¢607 million and another GH¢94,204,903.17 while VALCO owed it GH¢32,567,974.05 and NEDCo’s debt stood at GH¢177 million as at September 30, 2019.National Chairman of Staff Group of GRIDCo, Raphael Kornor, said at a press conference recently that the unavailability of funds to the company had forced it into rationing fuels for their staff’s travel for maintenance works while hoteliers have refused to make their facilities available to staff who travel for work due to their indebtedness.
He added that government had also not paid some GH¢250 million requested by the management of GRIDCo while it took steps to raise bonds to settle the legacy debt in the energy sector although the president had directed the Ministry of Finance to release the money.
“The first Energy Sector Levy Act bond which was raised by this present government in 2017/2018, our sister company, the VRA had over $550 million to settle their indebtedness with the banks but not a dime was given to GRIDCo to offset the ECG and VALCO indebtedness to us,” Mr Kornor lamented.He, therefore, called on the government to as a matter of urgency settle the ECG and VALCO indebtedness to GRIDCo which he says has stalled some new projects being undertaken by the company.Mr Kornor said if the government failed to settle the debts, then they would be left with no choice but to embark on industrial action, beginning with treating all emergency works as normal work within the normal working hours.The association said if by close of work on December 4, the debts were not cleared, they would embark on a sit down strike and impress upon their management to cut power supply to all customers which are indebted to it.Source:www.energynewsafrica.com
The Corporate Relations Manager for Vodafone in the Republic of Ghana, Ebenezer Amankwah, is set to join Ghana’s power transmitter GRIDCo as its new Head of Public Affairs.
This follows the retirement of Mr Albert Kwasi Quainoo, former Head of Public Relations at GRIDCo
The move comes at an interesting time for the power provider, following staff agitations over unpaid debts owed it by government institutions including Valco, ECG and NEDCo.
Recent power outages have also put the company under the spotlight; especially as the year draws to a close.
Ebenezer is expected to assume office this week in a move that is sure to bring some enthusiasm and vigor into GRIDCo’s engagement with the external public.
Ebenezer has more than 13-years experience in the private sector, having worked as a Broadcast Journalist at Citi FM and as Corporate Affairs Manager at Standard Chartered Bank.
At Vodafone, where he spent five years, he worked under three CEOs and was a key hand in driving the External Communications, Stakeholder Engagement and Sustainability units under Gayheart Mensah.
He was instrumental in several innovative and creative moves by the company, including a repositioning of the company as the digital telecom thought-leader in the industry.
Source:www.energynewsafrica.com
Energynewsafrica.com brings you exclusive photos captured by our photographer who covered the 3rd edition of this year’s Ghana Energy Awards held last Friday at the Labadi Beach Hotel in Accra, capital of Ghana.
The awards, which was under the theme: ‘Energy, a key to sustainable industrialisation’, hosted Ghana’s Everything Minister, John-Peter Amewu, as the Guest of Honour.
Key personalities who also attended the programme were the Deputy Minister for Energy in-charge of petroleum, Dr Mohammed Amin Adam, CEO of Volta River Authority, Ing. Emmanuel Antwi-Darkwa, CEO of Ghana Grid Company, Ing. Jonathan Amoako-Baah, Wisdom Ahiataku Togobo, Director for Renewable Energy and Nuclear Energy at the Ministry of Energy, CEO of West Africa Gas Pipeline Company, Greg Germani, Paa Kwasi Anamua Sakyi, Executive Director for IES, Benjamin Boakye, Executive Director for ACEP, CEO for Chamber of Bulk Oil Distributors, Senyo Hosi, Rev. Oscar Amonoo-Neizer, Executive Secretary of Energy Commission, and Mr. Jabez Amissah Arthur, former CEO of Bui Power Authority.Source:www.energynewsafrica.com
The Chief Executive Officer of Ghana’s hydro power generation company, Volta River Authority (VRA), Ing. Emmanuel Antwi-Darkwa, was adjudged the Power Sector CEO of the Year for 2019 in the West African nation at an awards ceremony organised by the Energy Media Group.
Ing Emmanuel Antwi-Darkwa competed for the award with Ing. Jonathan Amoako-Baah, CEO of GRIDCo, Mr Fred Oware, CEO of Bui Power Authority (BPA), Oheneba Ofori Boateng, CEO of Strategic Security Systems and Ernest Amissah, CEO of Sun Power Innovations.
Meanwhile, Volta River Authority, which he heads, also won the Innovation Project of the year award and Clean Energy Initiative Company of the year.
Other award winners are below:
Energy news reporter-Michael Creg Afful
Emerging Energy Comp-Webber Energy
Brand of the Year- Vivo Energy
CSR of year- Kosmos Energy
Innovation Project-VRA
Energy Consultancy-ACEP
Off grid Energy Solution-TOTAL GH
Energy Efficient Organisation Private – Ashesi University
Energy Efficient Public-Energy Commission
Energy Institution – Petroleum commission
Excellence in power generation- Karpowership
Strategic Deal-Springfield
Clean Energy Initiative-VRA
Rising Star, Individual- Ernest Amissah (CEO – Sun Power Innovations)
Renewable Energy Company- Strategic Security Systems
Energy Company Power-Bui Power Authority
Energy Company, Petroleum-Ghana Gas
Energy Company Renewable – Strategic Security System
In what could be described as a very rare achievement, Ghana’s only state refinery, Tema Oil Refinery (TOR) Limited has suddenly become a preferred choice for major oil traders, both local and international who are now seeking for opportunities to process their crude oil at the West African nation’s refinery at a fee.
With the confidence of traders and some finance houses restored in the refinery, TOR, which, hitherto, was in the news for lack of crude, has continuously processed circa 4 million barrels of crude oil out of a total of 11 million barrels since August 2019.
This follows the signing of a tolling crude oil processing agreement between Tema Oil Refinery and Woodfields Energy Resources Limited, a wholly Ghanaian-owned oil trading company, backed by the world’s largest oil and gas trader.
Woodfields Energy’s long history with the refinery and knowledge of the energy business in Ghana, in Africa, led them to originate and lead this transaction.
The contract would ensure that TOR continues processing of crude oil into the foreseeable future.
According to the Managing Director of TOR, the refinery is currently operating a tolling model where it processes crude oil for/on behalf of third parties at a fee.
This arrangement places minimum or no risk at all on the refinery as the processor since the crude oil is purchased, transported and marketed by the third party.
Mr Isaac Osei explained that the third parties who enter into tolling agreements with TOR are confident in the new operating efficiency philosophy, as well as the transparency at TOR and are, thus, motivated to do business with TOR.
He said although the current arrangement covers processing crude oil at CDU, the RFCC, which is currently under nitrogen pressure, would also soon be engaged after negotiations between TOR and some potential partners are completed.
Mr Osei, who was answering questions from energy reporters on the side-lines of the just ended African Refiners Association conference in Accra, mentioned that aside the current tolling agreement with Woodfields Energy, TOR is also negotiating to sign similar tolling agreements with other international traders like Gemcorp, BP and other traders.
The former COCOBOD CEO attributed this development at TOR to guarantees on plant efficiency and effectiveness.
“After a careful diagnosis of TOR’s challenges, the Board and Management met with the workers and charged them to work in an efficient manner in order to restore the company to its glorious days, and I’m happy to announce that with this new operating philosophy at TOR, our trading partners have realised that TOR is technically viable and could indeed give them value for money with the right structures in place,” Mr Osei stated.
He explained that TOR’s new philosophy of ‘operating efficiency’ is centred around the company’s utilities section (Power House), the power generation hub of the refinery.
Currently, TOR uses Refinery Fuel Gas (FG) that is generated as a by-product of the refining processes at RFCC and CDU. This fuel gas generated at TOR is, however, inadequate to fire the various heaters in the refinery.
The short fall, Mr Osei explained is made up with Fuel Oil in the form of AR or Cracked Fuel Oil, a high value product, a situation Mr Osei observed used to erode the refinery of its profit margins.
To surmount this challenge, Mr Osei revealed that the commerce and technical teams ensured that TOR came up with both long and short term strategies.
In the short term, the company has negotiated that all processing agreements with third parties should cater for the challenge of using AR to power the boilers in the refinery.
In the long term, however, TOR has set up a technical team which has presented an actionable plan to link TOR to VRA (Volta River Authority) to tap gas from the WAPCO (West African Gas Pipeline Company) pipeline to fire the furnaces and boilers instead of using Fuel Oil,” Mr Osei stated.
It would be recalled that when the Isaac Osei team took over the company in 2017, the plants at TOR had missed three cycles of scheduled shut down maintenance and that affected its reliability and performance.
The Board at one of its earlier meetings, therefore, decided to embark on the much needed shut down maintenance to improve upon the performance and reliability of both the CDU and the RFCC.
Mr Osei further touted a number of milestones TOR has crossed in the utilities department of TOR including the full payment for a 120tph Steam Boiler which will increase steam generation capacity for plant operations and ensure reliability of the refinery’s utilities system.
The Boiler, which arrived in Ghana in the third week of October 2018, is currently being installed and is expected to augment TOR’s power generation activities after its commissioning, which is expected by next year.
Mr Osei lauded the Nana Akufo- Addo government for the current positive developments at TOR.
He mentioned the immense support the government has given to TOR through the Ministries of Finance and Energy.
“TOR has reached this stage because the government believed in the strategic role we play here at TOR and has, thus, assisted us in many ways, including restoring our capacity and ensuring efficiency in our power generating activities. I’m happy to inform you that with the support of the government, TOR has completed the payment for its second heater and our capacity would be restored to the nameplate capacity of 45,000 bpsd, by the end of the first quarter of 2020. This means TOR will be able to refine one million barrels of crude oil in just 22 days, thereby, making room for more companies to refine their crude oil at TOR.”
The TOR MD further revealed that the TOR Board of Directors have been extremely supportive in this new development. He said the workers of TOR bought into the new challenge when they were tasked by the Board and management to embrace the new operating philosophy of efficient TOR.
Nonstop crude oil flow does not seem to be the only feat chalked by TOR.
Mr Osei said through the ingenuity of the maintenance division, loading rack 3, which was gutted by fire in 2010, has now been rebuilt at the loading gantry.
He was hopeful this would reduce the turnaround time at TOR’s loading rack and further help in serving customers better.
Source: www.energynewsafrica.com
Australian offshore oil and gas safety regulator NOPSEMA has resumed its assessment of Equinor’s environment plan for the Great Australian Bight drilling following the oil company’s re-submission of the plan requested by the regulator in November.
Equinor submitted the environment plan for the drilling of the Stromlo-1 exploration located in the Great Australian Bight in April 2019. NOPSEMA wasn’t able to make a decision within 30 days so, in late June, it requested further information from Equinor.
Equinor then in August requested more time and NOPSEMA resumed the assessment process in September.
Early last month, NOPSEMA issued a notice to Equinor “requiring them to modify and resubmit their environment plan for proposed drilling in the Great Australian Bight.” Equinor was given 21 days to provide NOPSEMA with further information about matters relating to consultation, source control, oil spill risk and matters protected under Part 3 of the Environment Protection and Biodiversity Conservation Act 1999.
On November 29, 2019, Equinor re-submitted its environment plan for proposed drilling activity in the Great Australian Bight, following an opportunity to modify and resubmit as a standard component of the assessment process.
In accordance with the Environment Regulations, NOPSEMA has resumed its assessment of Equinor’s environment plan, the regulator said on Monday, December 2.
The next decision point in the assessment process is scheduled to occur by December 30, 2019. Prior to this point, NOPSEMA will continue to assess the environment plan and consider potential environmental impacts from the proposed activity to ensure appropriate precautions are taken.
NOPSEMA noted it could extend the timeframe of the assessment if additional time is required.
Equinor’s planned well is located in the Ceduna sub-basin, off southern Australia. The well is located approximately 400 km southwest of Ceduna and 476 km west of Port Lincoln and in a water depth of approximately 2240 meters.
According to Equinor’s plan, the petroleum activity will occur anytime between October and May during the three years validity period from 2020 to 2022. No drilling will take place between June to September inclusive.
The duration of the drilling of the Stromlo-1 well is expected to be approximately 60 days, with the drilling planned to begin in late 2020.
In related news, Australia-based Karoon Gas has recently decided to ditch its exploration permit located in the Great Australian Bight area thus joining oil majors Chevron and BP who had previously abandoned their Bight permits.
Source:www.energynewsafrica.com
The Gas Exporting Countries Forum (GECF) last Friday launched a document titled Declaration of Malabo) at the 5th Heads of State Summit held in Malabo, Equatorial Guinea (November 26-29).
The Declaration outlines the way in which GECF member countries can cooperate to secure a long-term and sustainable energy transition.
The official Declaration of Malabo was submitted on Friday as the result of the Gas Exporting Countries Forum (GECF) 5th Heads of State Summit held in Malabo (November 26-29).
The declaration was presented by H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, and H.E. Yury Senturyin, Secretary General of the GECF.
Drafted during a week of Ministerial and High-Level Ad Hoc Working Group meetings, the document reaffirms the importance of retaining sovereign rights of member countries over natural gas resources; securing an energy transition and meeting sustainable development goals; attracting investment to gas infrastructure projects; fostering coordination among GECF member countries; and establishing pricing mechanisms, among other key objectives.
“One of the positions of the GECF is to specifically designate the terms and conditions of the contracts between producers and consumers. Our community insists that pricing connected to oil indexation should serve in favor of our member countries,” said H.E. Yury Sentyurin, Secretary General of the GECF. “Producers need to have a reliable flow of revenue to be able to ensure investment. With the connection between pricing and indexation, we try to ensure comfortable conditions for producers to ensure that their projects are implemented.”
The 5th Heads of State Summit represents the first time that the event was held on the African continent, reflecting increased efforts to attract African gas-producing countries to the organization.
“Mozambique and Tanzania have had huge gas discoveries…So many African countries have their own resources and they need to learn to manage them by themselves,” H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons for Equatorial Guinea. Said.
“The objective of this summit is to attract more African countries. This increases our numbers. The future is gas.”
The Declaration of Malabo builds on the existing frameworks for cooperation outlined by the declarations of GECF Summits held in Doha, Qatar (2011), Moscow, Russia (2013), Tehran, Iran (2015) and Santa Cruz de la Sierra, Bolivia (2017).
Source:www.energynewsafrica.com
The Head of Energy Desk at Accra-based Oman FM and Editor for energynewsafrica.com in the Republic of Ghana, Michael Creg Afful, has been adjudged the best energy news reporter for 2019.
Creg Afful won the award for the second year running against stiff competition from Kobina Amonoo of Angel TV, Francisca Dickson Arhin of the EIB Network and Jessica Acheampong of the Graphic Business, a state newspaper.
After winning the 2018 Energy Reporter of the Year, Creg Afful created energynewsafrica.com with the objective of using the platform to disseminate energy news in Africa and beyond.
At the recent launch of the news portal, after one of its creation, it emerged that energynewsafrica.com had reached over 55,000 people in 153 countries in the world.
Michael Afful(left) with Dr Mohammed Amin Adam, Deputy Minister for Energy in-charge of Petroleum, Republic of Ghana
The 3rd Ghana Energy Awards ceremony held under the theme: ‘Energy, the key to a sustainable economy for industrialisation’, was organised by the Energy Media Group.
The ceremony was to recognise and celebrate tremendous hardworking efforts of excellent stalwarts of the Ghanaian energy sector competing under the various categories.
Michael Afful(left) with Rev. Oscar Amonoo-Neizer(right), Executive Secretary of Energy Commission
In his opening remarks, the Chief Executive Officer for Energy Media Group, Mr Henry Teinor said the Energy Awards has become a benchmark in the annals of Ghana’s award ceremonies and that they, as an entity, had worked tirelessly to implement innovative ideas to make it stand tall among award ceremonies in Ghana.
He was glad the Energy Awards ceremony has gained strong footings not only in Ghana but Africa at large.
Michael Afful with Mr. Emmanuel Antwi-Darkwa, CEO of Volta River Authority(VRA)
“We shall not stop until our ceremony becomes the Oscars of the African continent,” he said.
He indicated that previous award winners were mandated to share their life experiences with students in Senior High Schools and that it is his hope that the status quo would be maintained by this year’s awardees.
Michael Afful with Seji Saji, Deputy Director at NADMO
On his part, Dr Kwame Ampofo, the Chairman for the Awarding Panel thanked the organisers and partners for their hard work and tenacity for keeping faith with the awards ceremony over the years.
He explained that the panel members were very fair in executing the mandate assigned to them.
“The award winners were meticulously chosen through a rigorous, free and fair procedure devoid of fear or favour to anyone.
“None of us panel members know who the award winners for the various categories were,” he emphasised.
Dr. Kwame Ampofo(left), former Chairman of Energy Commission with Michael Afful
Dr Ampofo, who was the past Chief Executive for the Energy Commission, congratulated the awardees and urged them to be spurred by the recognition and do more beneficial things for the society.
In an interview after receiving the award, Mr Creg Afful said it was an honour to receive the award for the second time.
He praised God for the strength and energy which helped him to go about fishing for information to disseminate to readers both home and abroad.
He thanked his colleagues and Management of Oman FM for the support and opportunity.
Mr Afful further appealed to players in the energy sector to help in building the capacity of reporters who have shown interest in reporting on energy.Mr Kwame Jantuah(left), a member of Ghana Energy Awards panel with Michael AffulMichael Afful with J K Ahiadome aka Majaro
Michael Afful with Mr Wisdom Ahiataku Togobo, Director Renewable Energy and Nuclear Energy at the Ministry of EnergyMichael Afful with Senyo Hosi, CEO of Chamber of Bulk Oil Distributors(CBOD)Source:www.energynewsafrica.com
The Chief Executive Officer of the West African National Gas Company, Ghana Gas, Dr Benjamin K. D. Asante, has been adjudged the Energy Personality of the Year for 2019 at an awards ceremony organised by the Energy Media Group.
Dr Asante competed for the award with Mr Gilbert Kofi Adarkwah, Advisor to CEO, Aker Energy, Wisdom Ahiataku Togobo, Director for Renewable and Nuclear Energy, Ministry of Energy, Michael Bozumbil, CEO-Petrosol, Dr Theophilus Acheampong, Energy Consultant, Emmanuel Antwi-Darkwah, CEO -VRA, Chris Chinebuah, CEO, For, Yang Qun, Chairman, Sunon Asogli, and Mr Fred Oware, CEO of Bui Power Authority.
Dr Ben Asante has been very instrumental as far as the development of Ghana’s gas infrastructure development is concerned.
With his over 21 years’ experience in gas industry, both home and abroad, Dr Asante has steered the affairs of the West African nation’s indigenous gas company so well that the country has made millions of dollars in savings.
Ms Augustina Osei(3rd left ) receiving the award on behalf of Dr Benjamin K.D. Asante
Under his leadership, Ghana made US$42.6 million savings due to utilisation of processed gas from Atuabo in place of Light Crude Oil (LCO) in 2017 and US$206 million in 2018.
Receiving the award on his behalf, Ms Augustina Osei commended the organisers of the awards for recognising the tremendous work the recipient, Dr Asante, has done at Ghana Gas.
Other award winners are below:
Energy news reporter-Michael Creg Afful
Emerging Energy Comp-Webber Energy
3.Brand of the Year- Vivo Energy
CSR of year- Kosmos Energy
Innovation Project-VRA
Energy Consultancy-ACEP
Off grid Energy Solution-TOTAL GH
Energy Efficient Organisation Private – Ashesi University
Energy Efficient Public-Energy Commission
Energy Institution – Petroleum commission
Excellence in power generation- Karpowership
Strategic Deal-Springfield
Clean Energy Initiative-
Rising Star- Ernest Amissah
Rising Star company, Renewable –
16.Energy Company Power-Bui Power Authority
Energy Company, Petroleum-Ghana Gas
18.Energy Company Renewable – Strategic Security System
Industry Leadership Power- GRIDCo
Industry Leadership Petroleum-GOIL
Energy Business Leadership, Male- Senyo Hosi
22.Energy Business Leadership Female – Efuwa Quansah
Board Chairman of Power Distribution Services (PDS) Ghana Limited, Philip Ayesu has denied media reports suggesting that he had a conversation with Gabby Asare Otchere Darko and Edward Akufo-Addo, who are family members of President Nana Akufo-Addo over how to share PDS shares.
According to him, the alleged conversation never happened, hence, the voice recording making the rounds is fake.
PDS signed a concession agreement with the West African nation’s Electricity Company of Ghana on March 1, 2019, but the government terminated the agreement on the basis of what it described as fundamental and material breaches of the contract by PDS.
Since the agreement was terminated, there has been media discussions about the issue with some blaming some members in the Akufo-Addo administration.
Ghanaweb.com, on Friday, November 29, 2019, published a story that suggested the accused, Mr Philip Ayesu, of wrongdoing.
The conversion on the alleged audio recording is transcribed below as published by the Ghanaweb.com.The conversation is transcribed below:
Gabby: So you can’t go below 40?
Phili Ayensu: No sir…
Gabby: At all…?
Philip Ayensu: Gabby, you see, you know we’ve come far ooo.
Gabby: Me, I’m just… I’m just trying to…
Philip Ayensu: No, I can’t go below the 40… I will rather prefer getting off and getting something out of it and getting off…
Gabby: Ok so? I see…
Philip Ayensu: This is to demonstrate that this is for me and not for anybody… And…and that is something I want to come very strong on on…
Edward Akufo-Addo (Bumpty): if that’s your final position, then,we have to let the other know, sign all the documents
Philip Ayensu: Ok sir. I appreciate you sir. Thank you very much…
Edward Akufo-Addo (Bumpty): Ok all right…
Philip Ayensu: Thank you.
However, in a statement issued and copied to energynewsafrica.com, Mr Phillip Ayensu described the audio recording as fake.
He added that he had referred the defamatory comments, which is aimed at tarnishing his hard won reputation, to his lawyers and would also be lodging a complaint with the Ghana Police Service.
“I can strongly confirm that the said recording is fake and pregnant with mischief to score an expensive political point using me as a pawn, since no such conversation ever occurred. It is but an elaborate fabrication with the help of an artificial intelligence-based software. It only reminds me of the reported voice spoofing video recording of President Donald Trump and Speaker Nancy Pelosi which was exposed by CNN, and recently a similar recording of British Prime Minister, Boris Johnson, and opposition leader Corbyn,” Mr Ayesu said in a statement.
Below is Mr Phillip Ayensu’s full statement:
PHILIP AYESU RESPONDS TO FAKE VOICE RECORDING
My attention has been drawn to a 29th November, 2019, Ghanaweb publication headlined: “PDS SCANDAL…” of an alleged recording of a conversation between myself and Gabby Asare Otchere Darko, discussing PDS shares.
I would like to put on record that this is a mischievous and totally fabricated story. It never happened. I have never hazarded the thought of owning 40% of the shares in PDS, and never owned anything close to that amount of shares in PDS for any person to have suggested to me for my shares to be reduced below 40%, and the records faithfully attest to this. I have never discussed any such thing with my lawyers or other shareholders, let alone with a third party.
I can strongly confirm that the said recording is fake and pregnant with mischief to score an expensive political point using me as a pawn, since no such conversation ever occurred. It is but an elaborate fabrication with the help of an artificial intelligence-based software. It only reminds me of the reported voice spoofing video recording of President Donald Trump and Speaker Nancy Pelosi which was exposed by CNN and recently a similar recording of British Prime Minister Boris Johnson and Opposition leader Corbyn.
Suffice to say, in any event, as an individual entrepreneur, I am at liberty to take advice from anybody I choose and also discuss with whomever I wish to discuss my private business, without the remote threat of breaching any law or agreement with any other party. But, it must be stressed that this particular purported conversation with Gabby Asare Otchere-Darko never happened. It is purely false and fake.
The perpetrator of this falsehood has been persistent in lies about myself and PDS in which one of my other companies has some equity participation and even extends it to my advisors.
I have consistently resisted any urge to respond to issues which have come into the public domain; however, the circulation of a conversation purportedly involving me which borders on criminality warrants a response and the taking of appropriate actions.
I have referred this defamatory mischief calculated to tarnish my hard-earned reputation to my lawyers and will be lodging a complaint with the Ghana Police Service.
Thank you.
Signed
Philip Ayesu.
Source: www.energynewsafrica.com
The Power Distribution Services (PDS) Ghana Limited has hinted of its plans to use all the necessary legal steps to seek redress following the Akufo-Addo’s administration’s decision to terminate the concession agreement signed with the Electricity Company of Ghana (ECG).
The Akufo-Addo-administration terminated the concession agreement the power distributor, PDS, signed with ECG on March 1, 2019, over claims of material and fundamental breaches in the agreement by PDS.
However, PDS says it disagrees with the government especially when the agreement clearly stated steps that should be taken in an event of the government declaring its intention to cancel the contract.
In a 40-point statement PDS issued to its stakeholders and intercepted by energynewsafrica.com, it said: “PDS does not accept the basis on which ECG and GoG assert their right to terminate the Transaction which, therefore, triggers a dispute as between PDS and ECG on one hand and PDS and Ghana on the other hand.”
According to PDS, “All the Transaction Agreements, i.e. the LAA, BSA and GSA have made provision for dispute resolution. The process in all cases starts from an attempt at a negotiated settlement and concludes with arbitration with the final award by any arbitration tribunal being binding on the parties.
“The LAA has elaborate provisions on post termination actions that the parties are required to take. A transition period of 180 days is required within which the parties are to retransfer in the same manner as was done prior to 1st March, 2019. Further within that Transition Period per the terms of the LAA, PDS is to remain responsible for the operation and management of the utility covering the Southern Distribution Zone and assures the power consuming public of its responsible behaviour.
“PDS remains a responsible Contracting Party with or without the supervision of the MCC. As such, PDS is committed to seeing through its obligations under the Transaction Agreements i.e.: the LAA, BSA and GSA per their terms and within the framework of Ghanaian law which is the governing law of the Transaction.
“PDS is carefully weighing its options and continues to reserve all its rights under the Transaction Agreements and Applicable Laws to pursue all available causes of action,” the statement said.
PRESS STATEMENT BY POWER DISTRIBUTION SERVICES GHANA LTD (PDS) ON TERMINATION OF CONCESSION BY ECG AND GOVERNMENT OF GHANA
On 31st July, 2019, the Government of Ghana through the Ministry of Information issued a statement announcing the suspension of the Concession (Transaction Agreements) between the Electricity Company of Ghana (ECG) and PDS, and Government of Ghana (Ghana) and PDS.
That single step set in motion a series of events that have culminated in the notification of termination by ECG of the Lease and Assignment Agreement (LAA) and Bulk Supply Agreement (BSA) between it and PDS on 23rd October, 2019; and the notification of termination by Ghana of the Government Support Agreement (GSA) between it and PDS on 28th October 2019. These events include a purported cancellation of the Electricity Distribution and Electricity Sale Licences of PDS by the Energy Commission (EC), both of which occurred on 23rd October, 2019 supposedly on the back of the notice of termination of ECG.
PDS respects the rights of Ghana and ECG to terminate the Transaction Agreements but notes that such termination even if permissible must be done in a manner that is contemplated within the framework of the Transaction Agreements and appropriate under Ghanaian Law.
PDS notes that some of the information available to the general public does not accurately reflect the events leading up to the suspension of the Transaction Agreements, and matters that arose thereafter which culminated in the events of 23rd October, 2019; the issuance of the notice of termination by ECG, the actions of the Energy Commission; and the subsequent issuance of a notice of termination by Ghana through the Ministry of Finance.
In order to put things in the appropriate perspective for the Ghanaian public and all other relevant stakeholders, we have released as part of this statement a document titled “Frequently Asked Questions on the ECG-PSP with PDS as Concessionaire”. We hope the information being shared will enable persons desirous of understanding the transaction and its fallouts appreciate the events that have occurred. Copies of all the Transaction Agreements will be made available on various platforms.
PDS continues to reserve all its rights under the Transaction Agreements and will take the necessary steps to ensure that the sanctity of those Agreements is respected.
PDS continues to reassure all Ghanaians that it remains a conscientious and responsible contracting party and will support any process that ensures consumers within the Southern Distribution Zone receive uninterrupted power supply.
Frequently Asked Questions on the ECG-PSP with PDS as Concessionaire
What is the ECG-PSP programme and when did it start.
The Electricity Company of Ghana (ECG) Private Sector Participation (PSP) programme is one of the key components of the Millennium Challenge Corporation’s (MCC) Compact II. Compact II is part of the Power Compact, signed by the Government of Ghana and the United States Government represented by the MCC in August 2014. The Compact aims to “reduce poverty through private sector-led economic growth”. One of the six (6) key programmes of the Compact is the “ECG Financial and Operational Turnaround” (EFOT). This involves, among others, private sector participation through the Concession to operate, manage and invest in the electricity distribution business of ECG (Concession). The Concession took effect on July 3, 2018 following an international tender administered by the Millennium Development Authority (MiDA) to select a qualified Concessionaire. The Concession agreements were ratified by the Parliament of Ghana on July 24, 2018. From the Effective Date of the Concession until February 28, 2019 (Transition Period), the Government of Ghana (GoG), ECG, and the Concessionaire diligently worked together to complete the Conditions Precedent for the transfer of the operation and management of the electricity distribution business of ECG to the Concessionaire. Following the agreement between the Parties that all Conditions Precedent were satisfied or converted into conditions to be fulfilled after the Transfer (Conditions Subsequent), the Concessionaire commenced its distribution operations on March 1, 2019.
What is Power Distribution Services Ghana (PDS) to do as Concessionaire
PDS is the sole entity responsible for the operation, management and investment in the distribution utility covering the Southern Distribution Zone (SDZ) hitherto serviced by ECG. PDS, as a licensed distribution utility, is regulated by the Public Utilities Regulatory Commission (PURC) and the Energy Commission (EC). Under the Concession, PDS is obligated to: (a) invest $580 million, (b) reduce Aggregate Technical and Commercial loss by 4.8 percentage points; and (c) reduce Collection loss by 11.8 percentage points from March 1, 2019 to February 28, 2024.
Was ECG supposed to supervise PDS as Concessionaire
Under the Concession agreement ECG and PDS have distinct roles. ECG remains the asset owner of the distribution network and bulk energy supplier to PDS. PDS is the primary operator, manager, and investor, of the distribution network serving the SDZ. Regulatory supervision of both PDS and ECG is under the PURC and EC. ECG and PDS relationship is governed by the Transaction Agreements. The Transaction Agreements comprise of the Lease and Assignment Agreement (LAA), the Bulk Supply Agreement (BSA) and the Government Support Agreement (GSA)
How many companies participated in the bidding process
In accordance with international best practice, the process opened with the publication of a Request for Expression of Interest (EoI) on September 30, 2015. Eighty-three (83) local and foreign entities expressed interest to participate in the process.
In April 2016, MiDA issued the Request for Qualification (RfQ) to the entities which expressed interest to participate. This required the interested entities to submit corporate documents and credentials to demonstrate their compliance to the qualifications set by MiDA. The qualification criteria comprised the legal, financial, technical, and operational capabilities deemed essential to operate and manage a distribution utility of the size and complexity of ECG. 3
Following the issuance of the RfQ, Eleven (11) entities submitted their Application for Prequalification. In keeping with MiDA’s commitment to transparency, the MiDA Board constituted a seven (7)-member Panel of experts to evaluate the Applications. The Panel comprised representatives from ECG, Ministry of Finance, Energy Commission, Ministry of Petroleum, Ministry of Power (the last two Ministries eventually being merged into one Ministry for Energy), and two representatives from the Office of the Attorney-General and Ministry of Justice. At the end of the evaluation exercise, the Panel shortlisted six (6) out of the eleven (11) Applicants.
The six (6) Shortlisted Applicants were:
Manila Electric Company (Meralco) from the Philippines,
Consortium of the CH Group/ EDF SA/LMI Holdings/Veolia SA,
BXC Company Ghana Ltd/Xiaocheng Technology Stock Company Limited/Shaanxi Regional Electric Power Group Company Limited,
Engie Energie Services, SA
Enel S.P.A and
Tata Power Company Limited/CDC Group Plc.
The Shortlisted Applicants were subsequently issued the Request for Proposal (RfP) document on August 30, 2016. The RfP outlined the requirements of the tender, instructions to the bidders, evaluation, and selection process, and drafts of the Transaction Agreements, PURC Rate Setting Guidelines, Distribution License, and Retail Sale License. In November 2017, after extensive discussions with GoG stakeholders and two Bidders’ Conferences, MiDA issued an Amended and Restated RfP. The amendments included an increase in the minimum Ghanaian equity participation from 20% to 51% and reduction of the term of the Concession from 25 years to 20 years.
By the deadline for submission of Proposals on March 26, 2018, MiDA received proposals from the Meralco-led Consortium and BXC. On the same day, the CH Group Consortium including EDF and Veolia submitted a letter withdrawing from the bidding process. Earlier withdrawals were received from Enel S.P.A on 7th October 2016, Engie Energie Services on 28th September 2017, and Tata Company/CDC Group Consortium on 12th February 2018.
By the end of the technical and financial evaluation, the Meralco-led consortium emerged as the Preferred Bidder.
Consequently, the Meralco-led Consortium (organised as PDS), remains qualified and in full compliance with the selection criteria.
Why did most of the companies withdraw from the bid.
According to MiDA, the other pre-qualified bidders withdrew from the process due to the changes introduced in the Amended and Restated RfP, primarily the changes in the minimum local Ghanaian participation of 20% to 51%.
When was the Meralco-led Consortium formally introduced to MiDA
Following the issuance of the RfQ, the Meralco-led Consortium comprising of Manila Electric Company (Meralco) of the Philippines, as Developing Country Operator, Operation and Financial Lead, AEnergia SA of Angola, GTS Engineering Services, Santa Baron Ventures Ltd and TG Energy Solutions Ghana Ltd formally made submission to MiDA on 26th February 2018. Subsequently, MiDA approved the Consortium and recognized the group through the acceptance of its Proposal on March 26, 2018.
What due diligence was conducted on the consortium members
Following the RfQ, each member of the Consortium presented relevant documentation which included, but was not limited to, corporate registrations, financial statements, and industry experience.
When did the Consortium submit its Proposal
The Meralco-led Consortium submitted its Proposal on 26th March 2018.
When was the Consortium selected as the Preferred Bidder
On 12th April 2018, MiDA notified the Meralco-led Consortium that the “Technical Proposal achieved a Technical Score above the minimum threshold provided in Section 4.3 of the RfP”. Following the evaluation of the Financial Proposal of the Meralco-led Consortium, MiDA determined the Consortium as the Preferred Bidder.
What was the next step after the Preferred Bidder was selected.
Under the Amended and restated RfP, the Bidders were given the opportunity to submit a “List of Exceptions” as part of the Bidder’s Proposal. The Exceptions were discussed and resolved between the GoG and PDS during the Negotiation Period that ensued in the course of May 2018. The outcome of these negotiations were utilised to complete the Transaction Agreements.
Who were the parties involved in the negotiations
The parties involved in the negotiation on the part of GoG, were ECG as owner of the asset to be leased, the Ministry of Finance (MoF) as representative of the shareholder (Ghana) of ECG, the Ministry for Energy (MoEn), the Ministry of Justice and Attorney-General’s Department (MoJAGD), the Energy Commission (EC), and the Public Utilities Regulatory Commission (PURC) as regulators of the sector. MiDA, and its advisers, and MCC were also participants in the negotiations.
What are the Transaction Agreements
The Transaction Agreements refer to three distinct agreements which govern the Concession. These are the Lease and Assignment Agreement (LAA), the Bulk Supply Agreement (BSA) and the Government Support Agreement (GSA). The Transaction Agreements were all executed on 3rd July 2018 and subsequently received Parliamentary approval on 24th July 2018.
Who are the Parties to the Transaction Agreement
The LAA and BSA were executed between ECG and PDS. While the GSA was executed between Ghana, represented by the Ministry of Finance (MoF), and PDS.
What is the Lease and Assignment Agreement (LAA)
The LAA is the primary agreement which governs the relationship between ECG and PDS with respect to PDS leasing the assets of ECG for the 20 years term of the Concession. The LAA sets out the rights and obligations of both ECG and PDS, including the standards which the parties are required to maintain. The LAA includes the PURC Rate Setting Guidelines, Distribution License and Electricity Retail Sale License.
What is the Bulk Supply Agreement (BSA)
The BSA sets out the terms and conditions on which ECG sells power capacity and energy, which PDS purchases. The BSA requires that the Capacity and Net Electrical Output will be provided from the Volta River Authority (VRA) and a group of Independent Power Producers (IPPs) whose Power Purchase Agreements (PPAs) with ECG have been designated as part of Portfolio PPAs under the BSA.
What is the Government Support Agreement (GSA)
The GSA sets out the framework of the relationship between Ghana and PDS. It also sets out the expectations of Ghana from PDS, which include compliance with the terms of the other Transaction Agreements and the threshold set for local equity participation in PDS; as well as further assuring the rights of PDS.
When and why was PDS incorporated
As part of the terms of the RfP, the Meralco-led Consortium was required to incorporate a Ghanaian entity which would enter into the Transaction Agreements with ECG and Ghana. As such PDS was incorporated on 29th June 2018 and entered into the Transactions Agreements on July 3 2018.
Who approved the investment plan and the structure.
The Investment Plan formed part of the Proposal submitted by the Meralco-led Consortium. This was the basis of MiDA’s determination that the Meralco-led Consortium garnered a “Technical Score above the minimum threshold provided in section 4.3 of the RfP.
How much were the shareholders of PDS required to invest in PDS over the initial 5 year period
PDS was required to invest a total of US$580 million, over the first 5 years of the Concession, at an average of US$115 million per year as a minimum (the Minimum Distribution Investment Commitment (“MDIC”)). The Shareholders of PDS, as a minimum, were required to invest equity of 30% of the MDIC for the period in the ratio in which each of the Shareholder Companies holds shares in PDS.
What had been the progress since the takeover i.e. Transfer Date.
Revenue to sales collection of PDS increased to 95.92%, from a region of not more than 90% at the time of takeover. PDS was appointed as collection agent by ECG on its Retained Accounts Receivable (customer bills issued by ECG) and collections were remitted to ECG.
PDS started with a system loss level of 27.3% but, through various technical and commercial interventions, was able to reduce the figure to 18.6% by the end of June 2019.
Official reports indicate that accumulated debt by ECG had been reduced from GH₵3.365billion to GH₵2.6billion within the first four months of the Concession. Such effective revenue collection meant adequate availability of funds to fuel the entire electricity matrix loop. There was also a reduction of outages through improved efficiencies under the leadership of PDS. Outages of 665 times per week as of Transfer Date in March 2019 had been reduced to 219 times per week. Technical records indicate that the System Average Interruption Duration Index (SAIDI) of 24.87hours from the previous year has been reduced to 17.26hours as of June 2019. This was equivalent to a 30.6% improvement as compared to the same period in 2018 which translated into stable power supply.
What are the Conditions Precedent (CPs)
The CPs refer to 45 actionable points that the Parties to the Transaction Agreement, that is Ghana, ECG and PDS were required to complete between the Effective Date (i.e. the date of signing of the Agreement which was 3rd July 2018) and the Transfer Date which was agreed on as 1st March 2019 by the parties.
Were all the CPs completed before the Transfer Date.
Most of the CPs were satisfied before the Transfer Date, i.e., March 1, 2019. However, for legal and procedural reasons, some CPs were converted into Conditions Subsequent that were to be completed within the first six (6) months post-Transfer Date.
Were the issuance of Payment Securities part of the CPs
Yes. As part of the CPs, PDS was required to present two payment securities, either in the form of Letters of Credit or Demand Guarantees.
Were the requirement to post the Payment Securities converted from CP to CS
No. Despite non-availability of retail tariffs to be issued by PURC for PDS and the full Portfolio PPA capacity and energy costs as at Transfer Date, MiDA indicated that the Payment Security requirements had to be satisfied.
What were the Payment Securities meant to cover
The provision of the Payment Securities were to ensure that ECG would have access to a pool of funds should PDS fail to meet its monthly payment obligations under the LAA or BSA. The Transaction required the issuance of 3-month cover of the payment obligations under both the LAA and the BSA. The LAA Demand Guarantee (Payment Security) was to cover 3-month lease payment which would be due to ECG based on a Public Utilities Regulatory Commission (PURC) approved figure whereas the BSA Demand Guarantee (Payment Security) was to cover 3-month cost of purchasing Capacity and Net Electrical Output under the terms of the BSA.
The payment securities were not meant to secure the assets of ECG but to secure the obligations of PDS to ECG under the LAA and BSA respectively.
How many Payment Security options were available to PDS
Under the LAA and BSA, PDS had two Payment Security options, namely, the provision of a Demand Guarantee or a Letter of Credit. The templates for the payment securities either as letters of credit or demand guarantees are provided for under the LAA and BSA. The LAA and BSA also allowed PDS to provide other forms of payment security as long as such other form reasonably comply with the terms provided by the LAA and BSA.
How were the amounts covered by the Payment Securities determined
Due to the lack of tariff information, there was no objective determination of quantum. MiDA provided the amounts to be covered to PDS. The approved tariff though should have determined the approved Lease Payment, and cost of Capacity and Net Electrical Output (Power Purchase Cost) and therefore the amounts to be covered by the Payment Securities.
What did banks, with rating specified by the LAA and BSA, require from PDS in providing the Payment Securities
All the Banks approached by PDS, including the prospective Mandated Lead Arrangers, required the commercial information on the Concession i.e. the tariff that PDS is authorized to charge end-users. Since the banks required a level of comfort, they were particular on the determination of the revenues of PDS based on the PURC approved tariff that allows the pass-through of all relevant costs. But due to the absence of the PURC approved tariff, the banks could only issue a cash-backed security. However, the banks’ themselves advised against this option as this was not a commercially viable option.
Why did PDS opt for the provision of the Payment Securities by way of Demand Guarantees and not Letters of Credit.
The LAA and BSA gave the options of either Demand Guarantees or Letters of Credit. All relevant parties agreed that due to the lack of the tariff, PDS was to take the Demand Guarantee option which could be provided by an insurance entity.
Why did PDS not wait to have all the information needed to secure the Payment Securities from a Bank.
MiDA informed PDS that the issuance of the Payment Securities could not be converted from a CP to a CS. Given the Compact II timeline, it was imperative to satisfy these CPs in order to comply with the Transfer Date of March 2019.
Since there was no tariff approved as of March 1, 2019, what tariff did PDS use to charge end users as at the Transfer Date.
PDS implemented the existing tariffs approved by the PURC before the Transfer Date. To make the tariff consistent with the Transaction Agreements, Ghana, ECG and PDS entered into an interim arrangement. This arrangement set out a revenue sharing methodology among the various players within the industry to ensure liquidity, i.e. power producers, including VRA (to be paid through ECG), GridCo, as the transmission service provider, and ECG itself, as leased asset owner, and PDS, as the distribution entity. This arrangement was put in place because the tariff in place prior to 1st March 2019 was not compliant with the Transaction, specifically, the PURC’s Rate Setting Guidelines.
Following the announcement by the PURC of new Tariffs effective July 1, 2019, was the value covered by the Payment Securities issued by PDS consistent with the PURC approved power purchase costs and lease payments
Under the approved tariffs which came into effect on July 1, 2019, with update on October 1, 2019, the 3-month lease payment and power supply costs was 22% less than the amount covered by the Demand Guarantees issues on behalf of PDS.
How much did PDS pay to secure the Demand Guarantees and how was the payment made.
The Demand Guarantees cost PDS a total of Twelve Million Two Hundred and Fifty Thousand Dollars ($12,250,000), as an all-in fee to CAL Bank (CAL) as advisor and arranger of the Payment Securities issued through Donewell Insurance Company Ltd (Donewell). Two-thirds of the fee was payable upfront prior to issuance of the Demand Guarantees and this was paid by some of the Ghanaian Shareholders of PDS. No portion of the Demand Guarantee fee was paid from ECG’s revenue at any point in time. The cost of the Demand Guarantees which is to be borne annually is an operational (mandated) cost that is to be paid by PDS as part of its operating expenses.
What was the issue with the Payment Securities i.e. Demand Guarantees
The attention of PDS was drawn to a letter dated 16th July 2019 from AlKoot Insurance and Reinsurance of Qatar (AlKoot) on 29th July 2019. AlKoot being the reinsurer of Donewell. AlKoot allegedly denied its obligation under the Demand Guarantees due to purported forgery committed by one of its employees and what it stated constituted fraudulent breach of trust. Two days after, on July 31, PDS was unceremoniously suspended through a mere press release from the Ministry of Information, effectively denying PDS the right to due process. Although suspension is not an option provided in the Transaction Agreements. Subsequently GoG constituted a fact finding mission which included the Minister of Interior and a Deputy Attorney-General and Minister of Justice. The report of the fact finding mission absolved PDS of any collusion for purposes of any wrong doing. The MCC also through MiDA, commissioned FTI Consulting, an independent forensic auditor, to carry out an investigation into the Demand Guarantees. Based on the forensic audit, PDS and all relevant stakeholders are cleared of any wrongdoing in the procurement of the payment securities.
On what basis has the Concession been terminated
ECG sent PDS a Notice of Termination dated 23rd October 2019. Per ECG’s Notice of Termination, ECG has taken the position that the transfer of assets and operations from ECG to PDS never occurred due to what it says is a failure of the Demand Guarantees. ECG states that the Notice of Termination takes effect from 28th February 2019. ECG has also indicated that it takes the position that the transfer of Staff from ECG to PDS never occurred and as such the Transferred Staff at all material times remained the Staff of ECG.
PDS further received a Notice of Termination from Ghana through the Ministry of Finance dated 28th October 2019. GoG’s Notice of Termination indicated that it is based on a term of the GSA which provides for buy-out payment to be received by PDS if the termination is to become effective.
What actions if any have been taken by the Regulators of PDS and ECG
The Energy Commission by two letters dated 23rd October 2019 purported to cancel both the Electricity Distribution Licence and the Electricity Sale Licence issued to PDS for a period of 20 years from the 1st of March 2019. The Energy Commission states that the cancellation of the licences is founded on the termination of the LAA and BSA by ECG. However, PDS has not accepted that decision and is entitled to pursue its rights under the terms of the Electricity Distribution Licence and the Electricity Sale Licence, as well as the Energy Commission Act, 1997 (Act 541) against the Energy Commission in its status as an administrative body being subject to law.
What are the effects of the Notices of Termination
PDS does not accept the bases on which ECG and GoG assert their right to terminate the Transaction which therefore triggers a dispute as between PDS and ECG on one hand and PDS and Ghana on the other hand.
38. What is the effect of the occurrence of a dispute
All the Transaction Agreements, i.e. the LAA, BSA and GSA have made provision for dispute resolution. The process in all cases starts from an attempt at a negotiated settlement and concludes with arbitration with the final award by any arbitration tribunal being binding on the parties.
What are PDS’ rights post Notice of Termination from ECG and GoG
The LAA has elaborate provisions on post termination actions that the parties are required to take. A transition period of 180 days is required within which the parties are to retransfer in the same manner as was done prior to 1st March 2019. Further within that Transition Period per the terms of the LAA, PDS is to remain responsible for the operation and management of the Utility covering the Southern Distribution Zone and assures the power consuming public of its responsible behaviour.
What is PDS current position on the termination by GoG and ECG
PDS remains a responsible Contracting Party with or without the supervision of the MCC. As such PDS is committed to seeing through its obligations under the Transaction Agreements i.e.: the LAA, BSA and GSA per their terms and within the framework of Ghanaian law which is the governing law of the Transaction. PDS is carefully weighing its options and continues to reserve all its rights under the Transaction Agreements and Applicable Laws to pursue all available causes of action.
Source: www.energynewsafrica.com
National Chairman of Staff Group of GRIDCo, Raphael Kornor, said at a press conference recently that the unavailability of funds to the company had forced it into rationing fuels for their staff’s travel for maintenance works while hoteliers have refused to make their facilities available to staff who travel for work due to their indebtedness.
He added that government had also not paid some GH¢250 million requested by the management of GRIDCo while it took steps to raise bonds to settle the legacy debt in the energy sector although the president had directed the Ministry of Finance to release the money.
“The first Energy Sector Levy Act bond which was raised by this present government in 2017/2018, our sister company, the VRA had over $550 million to settle their indebtedness with the banks but not a dime was given to GRIDCo to offset the ECG and VALCO indebtedness to us,” Mr Kornor lamented.
He, therefore, called on the government to as a matter of urgency settle the ECG and VALCO indebtedness to GRIDCo which he says has stalled some new projects being undertaken by the company.
Mr Kornor said if the government failed to settle the debts, then they would be left with no choice but to embark on industrial action, beginning with treating all emergency works as normal work within the normal working hours.
The association said if by close of work on December 4, the debts were not cleared, they would embark on a sit down strike and impress upon their management to cut power supply to all customers which are indebted to it.
Source:www.energynewsafrica.com 
Source:www.energynewsafrica.com
He praised God for the strength and energy which helped him to go about fishing for information to disseminate to readers both home and abroad.
He thanked his colleagues and Management of Oman FM for the support and opportunity.
Mr Afful further appealed to players in the energy sector to help in building the capacity of reporters who have shown interest in reporting on energy.
