President John Dramani Mahama has said that the Power Distribution Services (PDS) concession arrangement did not fail because it was fundamentally defective but rather due to mismanagement and the pursuit of personal interests that undermined its success.

Addressing a gathering at the sod-cutting ceremony for the Multi-purpose Solar Energy Project at the Dawa Industrial Park in Agotor on Thursday, November 6, the President explained that the PDS initiative was designed to bring private-sector efficiency into the country’s electricity distribution system.

However, he noted that the project collapsed as a result of poor oversight and the mishandling of its execution.

“I know that there was an attempt to involve the private sector in power utility and distribution. We all remember the example with PDS. PDS was not a bad thing; it was just handled wrongly, and many people had personal interests in it. That’s why it failed. But there is something to be said for injecting private-sector efficiency into public utilities,” Mr. Mahama said.

His remarks follow renewed public discourse on Ghana’s power sector reforms after the London Court of International Arbitration (LCIA) dismissed all claims filed by Power Distribution Services (PDS) against the Electricity Company of Ghana (ECG) regarding the cancellation of their concession deal.

The PDS agreement, initiated in 2019 under the Millennium Challenge Compact (MCC) between the Government of Ghana and the Millennium Challenge Corporation (MCC) of the United States, was designed to boost operational efficiency and service delivery within ECG.

As part of the 20-year concession, PDS was to oversee ECG’s assets and daily operations to improve nationwide electricity distribution.

However, the government suspended and later cancelled the deal after uncovering that the payment guarantees issued by PDS through Al Koot Insurance and Reinsurance Company of Qatar were fraudulent.

Subsequent investigations confirmed that the guarantees had not been authorised by Al Koot, a finding upheld by the Qatari Court of Cassation.

The discovery invalidated the documents, which were key to PDS’s financial credibility and the overall agreement.

In response, PDS sought arbitration in London, claiming wrongful termination and demanding compensation exceeding US$390 million.

ECG, represented by Omnia Strategy LLP under the leadership of Cherie Blair KC, maintained that PDS’s failure to authenticate the guarantees amounted to a serious contractual violation.

After extensive hearings, the tribunal ruled in favour of ECG, concluding that the fraudulent guarantees undermined the entire concession and justified its cancellation.

Meanwhile, the Ministry of Energy and Green Transition has pledged to recover all funds and assets owed to ECG.