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Bloomberg
Ghana will no longer have access to $190 million in grants from the Millennium Challenge Corp. after terminating a private consortium’s contract to operate the country’s electricity distribution network.
Ghana annulled agreement reached under US agency’s aid program as it questioned legitimacy of payment guarantees supplied by Power Distribution Services Ltd. to secure assets of Electricity Co. of Ghana Ltd. PDS, in which Ghanaian investors hold 51% and 49% is owned by Philippines-based Meralco, won the bid last year to manage ECG for 20 years.
The transfer of operations of Ghana’s southern distribution network to PDS on March 1 was valid “based upon the conclusions of the independent forensic investigation†and therefore the termination was unwarranted, the US embassy said.
Ghana first suspended the concession agreement in July as it investigated payment guarantees issued by PDS.
The five-year accord Ghana signed with the U.S. agency comprised two funding tranches; an initial $308 million available at the official start and a second portion of $190 million to be disbursed once the concession agreement was in effect.
The U.S. will keep implementing the program under the first tranche of funds, which will support improvements to the infrastructure of the southern distribution network, increase reliability and power access to key markets before the expiry in 2021, according to the embassy.