President John Dramani Mahama has stated that Ghana’s Power Distribution Services (PDS) concession agreement was fundamentally a good initiative but collapsed due to poor oversight and self-serving interests that undermined its success.
Speaking at the sod-cutting ceremony for the Multi-purpose Solar Energy Project at the Dawa Industrial Park in Agotor on Thursday, November 6, President Mahama explained that the PDS arrangement was intended to inject private-sector efficiency into the country’s electricity distribution system.
“There was an attempt to involve the private sector in power utility and distribution. We all remember PDS — it wasn’t a bad idea; it was just handled wrongly, and many people had personal interests in it. That’s why it failed,” he said.
Mr. Mahama’s remarks come amid renewed public debate following the London Court of International Arbitration’s (LCIA) recent dismissal of PDS’s $390 million compensation claim against the Electricity Company of Ghana (ECG) over the termination of the concession.
The PDS concession, launched in 2019 under the Millennium Challenge Compact (MCC) between Ghana and the Millennium Challenge Corporation (MCC) of the United States, aimed to enhance operational efficiency and service delivery within ECG through private-sector participation.
However, the government suspended and later cancelled the deal after discovering that the payment guarantees issued by PDS through Al Koot Insurance and Reinsurance Company of Qatar were fraudulent. Investigations confirmed the documents were unauthorised, a finding later upheld by the Qatari Court of Cassation.
Following the cancellation, PDS pursued arbitration in London, alleging wrongful termination. ECG, represented by Omnia Strategy LLP under the leadership of Cherie Blair KC, successfully defended the case, with the tribunal ruling that the fake guarantees rendered the agreement invalid.
Meanwhile, Ghana’s Ministry of Energy and Green Transition has vowed to recover all funds and assets owed to ECG in the aftermath of the ruling.
