Meralco finalizes equity investment in Ghana firm

MANILA, Philippines — Manila Electric Co. (Meralco) is finalizing its investment in Ghana’s power distribution utility to start operations and management by early next year.

Meralco officials flew to Ghana to finalize details of the company’s investment in the country’s power distribution utility, president Oscar Reyes said.

He said the documents being polished include the shareholder agreements, joint development agreements, financial agreements.

“We are working with Millennium Development Authority (MiDA), and the Electricity Co. of Ghana (ECG) for proper transfer by the first quarter or second quarter of 2019,” Reyes said.

“It’s for crafting, finalization and signing,” he added.

Under the initial agreement, Meralco is required to take in 30 percent of the joint venture with MiDA and ECG.

“For our equity… we are required to have 30 percent, but we can bring that down to 19 percent in the JV,” Reyes said.

This is because the power distribution utility has attracted a lot of interest, he said.

“It’s good if there are other parties who want to join the consortium - both local and foreign,” he said.

MiDA earlier chose Meralco as the preferred bidder for the management and operation of the electricity distribution business of the ECG.

It is the agency which oversees, manages and implements the programs under the Millennium Challenge Account set out by the government of Ghana and the Millennium Challenge Corp.

The ECG Private Sector Participation (ECG PSP) is one of five activities under the ECG financial and operational turnaround project of the Ghana Power Compact Program.

Under the ECG PSP, MiDA is auctioning off a 20 to 30 year concession to provide additional investment urgently required to improve the electric infrastructure, innovation and technology to enhance operational efficiency and efficient capital expenditure to improve service delivery.

At the end of the concession, all assets will be transferred back to ECG.

MiDA is targeting to complete all processes, including Cabinet review and recommendation of the concession agreement and the parliamentary ratification of the concession agreement by September.

This is not Meralco’s first overseas venture. In November 2013, Meralco’s partner, Lagos-based Integrated Energy Distribution and Marketing Ltd. took over Ibadan Electricity and the Philippine distribution utility was tapped as technical partner.

Last year, Meralco was invited by Port Harcourt Electricity Distribution Co. to provide technical partnership and service.

Port Harcourt is a former state-owned distribution utility which provides power to 14 million customers in four Nigerian states.