The Ministry of Energy has stated that Ghana’s inability to access $190 million in Millennium Challenge Corporation (MCC) grant funding in 2019 stemmed from governance shortcomings during the Power Distribution Services (PDS) arrangement approved under former President Nana Addo Dankwa Akufo-Addo.
This follows a ruling by an international arbitration tribunal in London which dismissed all claims filed by PDS against the Electricity Company of Ghana (ECG), formally bringing closure to a three-year legal dispute surrounding the termination of the concession.
Commenting on the tribunal outcome in a post on X on Wednesday, November 5, 2025, Richmond Rockson, spokesperson for the Ministry of Energy, said Ghana could have avoided the losses and legal complications if stronger due diligence, transparency and risk assessments had been applied when selecting the PDS consortium.
“The issue that landed the country in arbitration should never have occurred,” he wrote. “The errors made during the concessionaire selection process under the Akufo-Addo administration ultimately led to the collapse of the PDS deal.”
According to the Ministry, the cancellation of the contract erased Ghana’s chance to unlock the $190 million second tranche of MCC compact funds — money originally earmarked to support power distribution upgrades, modernise ECG infrastructure and accelerate reforms aimed at improving operational discipline in the electricity supply chain.
The Ministry further stated that steps will be taken to ensure that all monies or obligations due to ECG and the State following the tribunal’s judgment are pursued diligently.
The PDS concession was executed in 2019 as part of the second MCC compact. It was intended to introduce private-sector expertise into electricity distribution, reduce technical and commercial losses, and boost financial sustainability of ECG. However, government terminated the agreement months later over concerns relating to the validity of financial guarantees presented by the consortium.
Industry analysts say the PDS saga — coupled with the loss of MCC funds — set back power sector reform timelines and deprived the country of critical capital at a time when Ghana’s energy sector was grappling with mounting debts, rising system losses, and the need for grid modernisation.
Going forward, the Energy Ministry says any future reform programme or concession arrangement must be grounded in stricter oversight, validation of investor credentials, and alignment with global best practices to avoid repeating the PDS experience.
Source:Africa Publicity
