The government on announced that it had, through the Ministry of Finance and the Electricity Company of Ghana (ECG) Limited suspended the concession agreement with PDS with immediate effect in two years back.
The government explained that the decision followed the “detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which has been discovered upon further due diligence.”
It was in a letter signed by the Minister of Finance Mr Ken Ofori-Atta and addressed to Lawyer Akoto Ampaw, Chairman of the Negotiation Committee for the Electricity Company of Ghana (ECG) and Private Sector Participation (PSP), which said that, the Ministry of Finance requires that the Ghanaian Shareholding was consolidated and held by a single, newly incorporated, Ghanaian entity (the SPV - special purpose vehicle) in which the Initial Ghanaian Shareholders (and or any other Ghanaian investors from time to time would hold shares.
Therefore, the initial Ghanaian Shareholders would be required to transfer their respective shareholdings in PDS to the SPV, a structure which was to preserve Ghanaian control of PDS in the SPV (as opposed to three separate entities as is currently the case) and ensure that 51 per cent shares in PDS was always held by a Ghanaian entity. Eventually, the whole deal rumbled and SPV never came up, until the Agyapa deal late last year!
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