Ghana has lost the second tranche of a grant amounting to $190 million provided by the United States to improve its power supply.
This is based on a decision by the government of Ghana to terminate an agreement with the Meralco-led Power Distribution Services over invalid demand guarantees.
The country’s power distributor, the Electricity Company was taken over by the Philippines Meralco Consortium.
The takeover by the consortium known as Power Distribution Services, PDS Ghana Ltd took effect in March this year.
The PDS Ghana Ltd was expected to take charge of power distribution for the next 20 years.
But on July 30 the government of Ghana suspended the concession agreement between the Electricity Company of Ghana and the Philippines based company due to what it called “fundamental and material breaches”.
In a statement the US embassy said the Millennium Challenge Corporation (MCC) has confirmed that the money is no longer available after Ghana decided to terminate the concession agreement with PDS.
The statement contradicted the position of the government of Ghana about the validity of the concession agreement for private sector participation in the country’s Electricity Company.
“Based upon the conclusions of the independent forensic investigation, the U.S. position is that the transfer of operations, maintenance, and management of the Southern Distribution Network to the private concessionaire on March 1, 2019, was valid,” the US says.
The PDS consortium maintains that it did nothing wrong in the contract.
Ghana’s power crisis four years ago led to the government seeking funding to revamp the power distributor.
The impact of the power crisis was severe especially for businesses leading to job losses.