Ben Boakye, Executive Director, ACEP
THE AFRICA Centre for Energy Policy (ACEP) has indicated that it is highly disappointed with the manner in which the private sector participation aspect of the Electricity Company of Ghana (ECG) Financial and Operational Turnaround Project has been carried out.
According to the energy think-tank, in its latest update on the Power Distribution Services’ (PDS) concession challenges, the investigations that were carried out by MiDA and government affirmed that significant flaws were occasioned in the procurement of PDS as the concessionaire.
“It is evident that PDS does not have the financial muscle to invest as required by the LAA and the BSA. From the FTI report, the investigative team could not establish the relevant facts needed for them to have established the validity of the guarantees.”
ACEP said it appears that the investigative team “lacked the needed authority to even properly engage with Al Koot for them to have been cooperative. They made efforts to prove that MiDA and the financial advisors did nothing wrong, but did not show evidence of the advice they gave on the financial capacity of the PDS. Rather, they emphasized delay in tariff announcement and portfolio PPA as main reasons for PDS’ inability to secure the demand guarantee.”
From the review of all the events, ACEP said it could conclude that Cal Bank, Donewell and MiDA did not make any serious effort to verify the authenticity of the demand guarantee. “These parties cannot pretend not to know that for a guarantee of $350 million, the engagement with the top hierarchy of Al Koot was necessary. This could have been achieved through video conferencing to authenticate the published faces on Al Koot’s website.
“It is therefore surprising that FTI could not inquire through its investigation why the parties did not see it fit to engage the top hierarchy of Al Koot.
“Whiles ACEP awaits conclusion on government’s review of the circumstances, it will be surprising to see PDS given the nod to continue with the concession,” it mentioned.
BY Samuel Boadi