President John Dramani Mahama has attributed the collapse of the Power Distribution Services (PDS) concession to poor management and personal interests rather than a fundamentally flawed concept, following this week’s arbitration tribunal ruling that favored the Electricity Company of Ghana (ECG).
Speaking at a sod cutting ceremony for a multipurpose solar energy project at the Dawa Industrial Park in Agotor on Thursday, Mahama stated that Ghana could still benefit from private sector participation in power distribution if transparency and due diligence are maintained. The President’s remarks came days after the London Court of International Arbitration (LCIA) dismissed all claims filed by PDS Ghana Limited against ECG, ruling that demand guarantees issued for the transaction were void from the outset.
“I know 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,” Mahama said. “But there is something to be said for injecting private sector efficiency into public utilities.”
The PDS arrangement, launched in 2019 under the previous administration, sought to transfer ECG management to a private operator as part of the Millennium Challenge Compact II with the United States. The government suspended and later terminated the agreement after discovering that payment guarantees provided through Al Koot Insurance and Reinsurance Company of Qatar were fraudulent.
PDS had sought nearly 390 million US dollars in damages for alleged wrongful termination of the Lease and Assignment Agreement and Bulk Supply Agreement signed in July 2018. ECG, represented by Omnia Strategy under Cherie Blair, successfully defended Ghana’s position, with the tribunal dismissing all PDS claims.
The Energy Ministry noted that poor decisions during the selection and approval process under the previous administration contributed to Ghana losing approximately 190 million US dollars in compact funding from the US Millennium Challenge Corporation in 2019. The ministry said the country also missed a critical opportunity to implement key reforms within ECG.
Legal analysts describe the ruling as reinforcing ECG’s position that termination of the PDS concession was justified. They highlight the financial and reputational risks of inadequate due diligence in large scale public private partnerships.
For Mahama, whose government now emphasizes renewable and sustainable energy, the episode offers both a cautionary tale and a lesson in reform. The Dawa solar project, officially named the Norbert Anku Solar Park, is set to become one of the largest solar installations in West Africa with a capacity of 1,000 megawatts by 2032. The project reflects the administration’s renewed focus on accountability and private sector collaboration in Ghana’s power sector.
The initiative will be executed in phases beginning with an initial 200 megawatt installation, which will supply power to the Enclave Power Company network serving industrial clients rather than the national grid. The facility is expected to provide clean, stable and affordable electricity to manufacturing and export zones, supporting the government’s 24 hour economy initiative.
President Mahama emphasized that his administration has pledged to make energy a catalyst for inclusive industrialization. He stated the objective is to create a Ghana where factories, cold storage facilities, digital hubs and export plants can operate efficiently day and night without power interruptions or high energy costs.
Source: newsghana.com.gh
