The government of Ghana has cancelled the 20-year electricity distribution concession it had signed with Power Distribution Services (PDS), a consortium led by the Philippine energy group Meralco, considering that the payment guarantees provided were not satisfactory.
In 2014, the US government foreign assistance agency Millennium Challenge Corporation (MCC) had agreed to provide US$498m in funding to Ghana to help the country restructure its power sector and boost private investment in this sector. Ghana then committed to transfer operations carried out by state-owned power company Electricity Company of Ghana (ECG) to a private consortium under a 20-year concession. PDS started operations as agreed in March 2019.
Ghana's decision to terminate the contract with PDS prompted the US government, through the MCC, to cancel a US$190m grant to finance the transfer of the concession from ECG to PDS. MCC will still grant US$308m under the MCC Ghana Power Compact.