The promoters of the botched Power Distribution Services Ghana Limited (PDS) are out playing mind games after their defeat at the London Court of International Arbitration (LCIA) in their case against the Electricity Company of Ghana (ECG).
In a statement issued shortly after losing the US$390m claim in the London tribunal, they said they were “vindicated” by the tribunal’s judgment, which confirmed that PDS made no misrepresentation regarding the financial instruments. Accordingly, PDS considers itself vindicated on the core allegations, consistent with its position from the outset.
Despite its actions, including forgery, leading to Ghana not getting $190 million loss to Ghana, PDS made up of TG Energy Solutions Limited (TG), Santa Baron Ventures Limited (Santa), GTS Engineering Services Limited (GTS), and TBK Ghana Limited (TBK) and Manila Electric Company Limited (Meralco), 49 per cent shares are for two foreign companies, a Filipino company with 30 per cent shares and Aenergia, an Angolan company with 19 per cent shares, hold a different view.
According to the Consortium, “among other things, the Tribunal: Rejected all of ECG’s claims for damages;
Found that PDS held a genuine belief in the validity of the financial instruments it provided to ECG; Fully accepted the results of the independent investigation that found that “there was no information to suggest that … PDS … committed or conspired to commit fraud or other malfeasance” in relation to the financial instruments”.
“PDS is reviewing the decision with counsel and will provide a further update following that review. This statement does not constitute acceptance of the tribunal’s reasoning, and PDS expressly reserves all rights and remedies, including in relation to other parties”.
ECG secured a decisive legal victory in London after an international arbitration tribunal dismissed all claims brought against it by PDS.
The ruling, delivered after nearly three years of proceedings, ends a long-running dispute over the controversial termination of the PDS concession agreement. This deal was once promoted as a significant step towards reforming Ghana’s power distribution sector.
In 2019, PDS assumed responsibility for managing ECG under a 20-year concession agreement as part of the Millennium Challenge Compact (MCC) programme between the Government of Ghana and the Millennium Challenge Corporation (MCC) of the United States.
The agreement was intended to bring private-sector efficiency into ECG’s operations and improve electricity distribution across the country. However, just months into the arrangement, the Government of Ghana, through ECG, suspended and later terminated the contract following boardroom wrangling over control of shares by friends and family members of President Akufo-Addo, who wanted a bite of the state cherry.
In a letter dated 27 March 2019, signed by then Minister of Finance Ken Ofori-Atta and addressed to the late Lawyer Akoto Ampaw, Chairman of the Negotiation Committee for the ECG and Private Sector Participation (PSP), the Minister of Finance indicated that TG Energy Solutions’ shares had increased to 28 per cent as part of efforts to secure and safeguard Ghanaian ownership of PDS.
But many said this was an attempt to cut some of the shares that Philip Ayensu, a barbershop owner at East Legon – Accra, had. Though a neighbour of Gabby Asare-Otchere Darko, a cousin of the then President, Philip was holding the shares of Joseph Siaw Agyapong, founder of the Jospong Group and owner of Zoomlion Waste Management.
Agyapong, was behind Meralco from Manila. He had another front, called David Asare, in the transaction, and together they used Andrew Kofi Egyapa Mercer, then the New Patriotic Party (NPP) Member of Parliament for the Sekondi Constituency in the Western Region, as a lawyer, secretary, and director in the consortium. He had also sat in Parliament to approve of the same transaction when the matter came up for debate.
The termination followed revelations by the then Energy Minister, John Peter Amewu, that the payment guarantees provided by PDS through Al Koot Insurance and Reinsurance Company of Qatar were fraudulent. These guarantees were a crucial requirement of the deal, designed to secure PDS’s financial obligations under the concession.
Although PDS assured that all preconditions for the transfer had been met, investigations showed that Al Koot had not authorised the guarantees in question. A government delegation led by Ambrose Dery returned from Qatar with a damning report on the guarantee. Later court rulings in Qatar, including from the Qatari Court of Cassation, confirmed that the documents were indeed forged.
Following the termination, PDS initiated arbitration proceedings in London, claiming ECG’s actions were wrongful. The company sought a declaration of wrongful termination, direct costs of about US$39.4 million, and alleged lost profits of US$351.5 million. Other litigations were commenced by PDS in Ghana.
ECG, represented by Omnia Strategy LLP and led by Cherie Blair KC, strongly defended the case, asserting that the termination was entirely justified and in the national interest. ECG contended that PDS had failed to exercise due diligence in verifying the authenticity of the payment guarantees, thereby fundamentally compromising the concession.
After years of legal submissions and hearings, the London-seated tribunal dismissed all of PDS’s claims in their entirety. The tribunal upheld ECG’s position that the fraudulent guarantees went to the heart of the concession and justified its termination of the agreement.
The ruling is a significant win for ECG and the Government of Ghana, shielding the state from potential financial liability amounting to hundreds of millions of dollars. It also brings closure to one of the most contentious chapters in Ghana’s recent energy sector history.
With this victory, ECG is now positioned to move forward and focus on improving power distribution for Ghanaians, free from the shadow of the PDS dispute. The decision also reaffirms the state’s stance on protecting public resources and ensuring accountability in major national contracts.
Meanwhile, the Ministry of Energy has welcomed the arbitration ruling in the PDS-ECG dispute and reminded the country of the US$190 million in compact funding from the US Millennium Challenge that was lost in 2019 due to the PDS scandal.
In a press statement, signed by Richmond Rockson, Spokesperson and Head of Communication, the Ministry of Energy said steps were underway to recover amounts due ECG from PDS.
“The Ministry of Energy and Green Transition wishes to inform the public that the Government of Ghana has taken note of the final award rendered by the London Court of International Arbitration (LCIA) in the matter between Power Distribution Services (PDS) Ghana Limited and the Electricity Company of Ghana (ECG).
PDS had commenced arbitral proceedings at the LCIA against ECG, seeking various claims arising from the termination of the concession agreement. After a full hearing, the Arbitral Tribunal, in its final award, dismissed all claims sought by PDS”.
“Importantly, the Tribunal further found that the Demand Guarantees issued in respect of the transaction were void ab initio (invalid from the outset) and consequently held that the Government of Ghana was entitled to terminate the concession agreement.
“The Government notes that this situation should never have arisen in the first place.
“The poor decisions made during the selection and approval process of the concessionaire, which led to the formation of Power Distribution Services (PDS) under the previous administration, directly contributed to the current outcome.
“As a result of those decisions, Ghana lost approximately US$190 million in compact funding from the US Millennium Challenge Corporation (MCC) in 2019 and missed a critical opportunity to implement key reforms within the Electricity Company of Ghana (ECG).
“The Ministry assures the public that all necessary legal and administrative steps are being taken to recover any amounts due to ECG and the State as a result of this process. The Ministry reaffirms its commitment to accountability, transparency, and sustainable energy reforms consistent with His Excellency President John Dramani Mahama’s agenda.
President Mahama has since commented after the LCIA decision, saying the PDS concession arrangement did not fail because it was fundamentally defective, but instead due to mismanagement and the pursuit of personal interests that undermined its success.
Speaking at the sod-cutting ceremony for the Multi-purpose Solar Energy Project at the Dawa Industrial Park in Agotor, yesterday, Thursday, November 6, the President said while the PDS arrangement was intended to inject private-sector efficiency into Ghana’s power distribution, it collapsed because of how it was managed.
“I know that 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. But there is something to be said for injecting private-sector efficiency into public utilities,” President Mahama said.
His comments come in the wake of renewed discussions about Ghana’s power sector reforms following the LCIA’s final ruling, which dismissed all claims brought by PDS against the ECG over the termination of their concession agreement.
