Power retailer Manila Electric Co. said Thursday it is coordinating with its local partner in Ghana over the suspension of its concession for the operation and maintenance of the assets and facilities of the Electricity Company of Ghana.
“Meralco received information that the concession for the operation and maintenance of the assets and facilities of the ECG which was awarded to the Power Distribution Services Ghana Ltd. last March 2019 had been suspended by the government of Ghana effective July 31, 2019 due to alleged material breaches in the provision of the demand guarantees by PDS,” Meralco said in a disclosure to the stock exchange,
The demand guarantees were key prerequisites for the turnover of the assets and facilities of ECG to PDS.
“Meralco is currently coordinating with its local partners in PDS to obtain more information and clarification on this matter and will fully cooperate with the Government of Ghana to address any issue affecting the same,” it said.
Meralco and other members of the PDS consortium announced in March a plan to invest of more than $580 million to strengthen the operations of the ECG which supplies 80 percent of the population of Ghana through three million accounts.
The assets and operations of the ECG were handed over to the PDS”•a consortium between Meralco, through Meridian Power Ventures Ltd., AEnergia SA, an Angolan company and three Ghanaian firms”•TG Energy Solutions Ghana Limited, Santa Power Limited and GTS Power Ltd. on March 1.
“PDS Consortium intends to invest over $580 million for capital expenditures and is expected to strengthen the governance, management and operations of the ECG and improve the delivery of power to end-users as well as support Ghana’s socio-economic growth,” Meralco said.
The hand-over was pursuant to the award to the PDS Consortium which will be the electricity service provider in all of ECG’s operational areas in the Southern Distribution Zone of Ghana, under a 20-year concession agreement approved by the government of Ghana.
ECG’s assets would be leased to the PDS, the concessionaire, while the ECG would become an asset holding company. After the end of the concession, all assets would be transferred back to it.
The Meralco-led consortium was chosen as the preferred bidder to manage, operate and invest in the ECG privatization process last year.
Meralco is the country’s biggest power distributor with over six million customers in its franchise area. It also has a stake in a distribution utility in Nigeria also in West Africa.
Meralco and partner Integrated Energy Distribution and Marketing Ltd. took over the operations of Ibadan Electricity Distribution Company Plc. and Yola Electricity Distribution Co. Plc. in November 2013.