French EDF, Veolia and local partner: CH Group rejected Government policy of 51 percent mandatory local content on ownership.

Ghanaian owned CH Group, EDF and Veolia are protesting against the latest local content policy direction under the amended Request for Proposal (RFP), aimed at Ghanaian majority ownership of the concession of ECG.

The latest amendments under the amended RFP introduced mandatory 51 percent Ghanaian ownership – ultimate legal and beneficial ownership by Ghanaian citizens.

It puts restrictions on creating different categories or classes of shares in the new company; stipulating a requirement for this 51 percent Local Ownership.

This 51% Local Ownership is to be maintained for full period of the the concession’s duration; a potential company event of default would trigger the default buy-out-option if this 51 percent threshold is not maintained.

According to the consortium, the above requirements significantly impact the consortium’s ability to structure a workable solution. The consortium further stated its financiers have cautioned that such restrictions will ultimately impact the concession’s bankability.

It seems that politicians and local government doesn’t want to understand that this 51% local ownership is an obstacle to all legitimate foreign investors because it means a loss of control over their investment and putting the foreign investment in the hands of a “third party”.

This a negatively impacting on bankability and financing of the concession as a whole”.

The local content on ECG is not the only in the pipeline in Ghana, foreign investors are are checking Local Content carefully as it can be a threat to their investments as a whole.

Although Ghanaian entities have the ability to raise local and international capital to meet the investment requirements for the concession; and to suggest otherwise in this modern world where capital is free-flowing there is no foreign investor prepared to invest and lose control over your own investment.

The MiDA, MCC and the GoG, the source insisted, should push ahead with the selection process and award the concession to the most capable entities who are still left in the race and who are willing to play by the rules in the interest of the good people of Ghana.

But one thing is sure, losing investors because of too far stretching Local Content is not in the interest of Ghana.