ACEP Disappointed With ECG Turnaround Project

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

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