Power retailer Manila Electric Co. and other members of the Power Distribution Services Ghana Ltd. consortium will invest more than $580 million to strengthen the operations of the Electricity Company of Ghana.
Meralco said in a disclosure to the stock exchange the assets and operations of ECG were handed over to the PDS, a consortium of 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 board of directors and the ECG PSP [private sector participation] stakeholders anticipate a smooth transition, and count on the support and cooperation of all Ghanaians to ensure the success of PDS as the new electricity distribution operator in the Southern Distribution Zone of Ghana,” the Millennium Development Authority of Ghana said earlier.
Meralco officials announced in December that it was hoping to start managing and operating the electricity distribution business of ECG in West Africa by the first quarter.
The Meralco consortium was chosen as the preferred bidder to manage, operate and invest in the ECG privatization process last year.
Meralco senior vice president and head of customer retail services, corporate marketing and communications Al Panlilio said earlier the Ghana bid was for equity ownership and management of the concession company to take over the ECG, which supplies 80 percent of the population of Ghana through three million accounts.
Meralco 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.