The Manila Electric Co. (Meralco) said the government of Ghana had officially terminated the concession for the operation of power assets to a consortium where the electricity distributor is part of.
Last March, the Millennium Development Authority of Ghana (MiDA) handed over the electricity distribution assets and operations of Electricity Company of Ghana Ltd. (ECG) to Power Distribution Services Ltd. (PDS), a consortium wherein Meralco owns a 30 percent stake.
Other members of PDS include AEnergia SA, company from Angola as well as three local firms in Ghana such as TG Energy Solutions Ghana Limited, Santa Power Limited and GTS Power Ltd.
However, by July, the government of Ghana suspended the deal due to alleged material breaches in the provision of the demand guarantees by PDS.
In a disclosure to the Philippine Stock Exchange, Meralco said yesterday that based on a letter signed by minister Ken Ofori-Atta of the Ministry of Finance of Ghana, a forensic audit done by auditors chosen by MiDA indicated that purported demand guarantees were invalid as they were issued without due authorization and in excess of the mandate of Al Koot Insurance and Reinsurance, a Qatari insurance firm.
The company said the demand guarantees were key prerequisites and condition precedent for the turn-over of the assets and facilities of ECG to PDS.
Prior to the problems that hit the deal, stakeholders of PDS were eager to invest more than $580 million to strengthen the operations of the ECG which supplies 80 percent of the population of Ghana with more than three million customers.