In October 2021, Edward Akufo-Addo, brother to the then President Nana Akufo-Addo and current leader of the Opposition, became a shareholder of Village Corp Holdings Ltd, an offshore entity registered in Mauritius; VCH is the investment vehicle for a renewable energy company in Ghana, Village Corps Ghana (VCG), that is trying to build a 40MW biomass power plant near Nsutem.
Making Edward a Director of an energy company raises serious legal questions and may contravene several laws in more than one jurisdiction. It made Edward a clear Politically Exposed Person (PEP) who should have disclosed his links to VCH to Ghanaian authorities. Something that was never done at the time.
The move was deemed so controversial that not two months later, the management company administering VCH in Mauritius resigned their commission for this reason.
Edward’s ascendancy to VCH also ties in with the timeline of when licenses were issued, including the 20-year Power Purchase Agreement (PPA) issued to VCG and the EPA licenses that do not appear to have followed due process.
Background
Public anger towards corruption has ebbed and flowed in Ghana over the years, on the odd occasion rising to an outcry and call for action that cannot be ignored. Investigations and probes are launched as much because of the country’s open democracy as because of the constant change of power between the two large parties, the New Patriotic Party (NPP) and the National Democratic Congress (NDC). Each new government brings with it a newfound resolve to investigate the crimes of the last and makes for an attractive promise on each of their respective election manifestos. Politically charged they may be, but the current renewed drive beginning this year aimed at the previous government led by Nana Akufo-Addo and the NPP has brought to light a slew of allegations that are eye-watering even by Ghanaian standards. And especially those rumbling away in the energy sector involving the Electricity Company of Ghana Ltd (ECG) – the state-owned power utility.
Even before comprehensive investigations were launched in March by President John Dramani Mahama and his NDC party, Energy Minister John Abdulai Jinapor had already exposed serious procurement irregularities within a month at ECG in February. Containers imported by the utility were being delayed at ports and running up huge demurrage costs at the main Tema port in Accra, abandoned and sold at auction for a pittance and then re-sold back to ECG for close to their original value.
Staggering inefficiencies created by centralised and opaque decision-making under Nana Akufo-Addo have also plagued the state utility, the scale of which beggars’ belief and that have exacerbated already unsustainable levels of debt crippling Ghana. Many of the current problems facing ECG can be traced back to the large uptake of Independent Power Producers (IPPs) in the middle of the last decade. It followed on from 3 years of electricity shortages between 2012 and 2015 and the subsequent response to it. The previous government wholeheartedly turned to Independent Power Producers (IPPs) and the private sector in general to fill the gap.
Against the advice of experts and regulators, a rash of Power Purchase Agreements (PPAs) on questionable terms were signed. By 2018, the installed capacity of around 5083MW was double the peak load in the country of around 2700MW. And because of the ‘take-or-pay’ contracts that were typical of such deals, where ECG guaranteed 90% uptake of each IPP’s electricity production, whether they needed it or not, the country was lumbered with a massive bill for unwanted electricity. In 2023, Fitch, a credit-rating agency, reported that the cost of this glut was around 5% of Ghana’s entire GDP.
And with the flood of money came corruption and scandal.
By far the biggest of these, and the one widely labelled as the largest in Ghana’s history, was unmasked even before President Manama’s current drive during Nana Akufo-Addo’s tenure. It involved the attempt to privatise the distribution network of the state utility. A Filipino consortium, Power Distribution Services (PDS), won the 20-year concession to run the network in July 2018 and began operation in February 2019. It lasted all of 8 months. Officially, the government backtracked over the deal, pointing to doubts over PDS’s ability to source the USD$650 million it had contractually promised to invest. But the affair was instigated by a group phone call leaked in August 2019. In it, Edward Akufo-Addo, brother to the then-sitting President and locally referred to as “Bumpty”, a PDS board member and Nana Akufo-Addo’s nephew, amongst others, discussed how to manipulate PDS’s shareholder structure. Terminating the concession cost the U.S. government almost USD$190 million in already-disbursed aid for the privatisation.
https://www.facebook.com/share/r/15YvMmE5DW/
The leaked group phone call in which Edward Akufo-Addo is caught discussing manipulating the shareholder structure of PDS
Edward Akufo-Addo and VCH
In this context, in what can only be described as brazen exactly 2 years after PDS was disbanded in October 2021, Edward Akufo-Addo became a shareholder of a renewable energy company looking to build a 40MW baseload biomass power plant in Nsutem, next the Accra-Kumasi highway, even though his brother was President and there was clear conflict of interest.
Placing such a prominent Politically Exposed Person (PEP) as they are officially labelled, as Edward Akufo-Addo was, made the more concerning because of his recent brush with the PDS scandal. Installed onto the board of a company that was actively applying for licenses in Ghana. Edward was never declared to the Registrar of Companies in the West African country, as is due process and appears to have contravened several serious financial misconduct laws that could have criminal consequences in Ghana.
Village Corp Holdings Ltd is the offshore investment vehicle for the Ghanaian-registered venture, Village Corps Ghana (VCG) . VCG was awarded a 20-year PPA (Power Purchase Agreement) with the state utility company on 27th July 2020 for 20MW, increased about a year later to 40MW, or 2.3% of Ghana’s entire peak load at the time of around 1782MW. This was at a time when it was abundantly clear that Ghana had a severe oversupply problem and the country was haemorrhaging money because of it.
Proposed location of the VCG Biomass Power Plant and farming areas in Ghana – Recast Energy Feasibility Final Report P.34
VCG Project Summary June 2021 – showing the location of the proposed 40MW biomass power plant near Nkutem by the Accra-Kumasi highway – P.11
As of March 2023, he remains undeclared in the VCG company filing at the Office of the Registrar in Ghana. The largest declared shareholder of VCG is the offshore investment vehicle VCH, of which Edward was made a Board member. In Ghana, PEPs must be declared, even if the holding company that owns them is not in Ghana.
Village Corps Ghana Limited Company filed with the Office of the Registrar of Companies on 17th May 2023
Adding Edward to the VCH company structure was deemed so controversial by the Mauritian management company that administered the offshore company, they swiftly resigned from the role within 2 months. Lemeul Corporate and Trust Management Limited filed a letter on 10th December with the Financial Services Commission (FSC) in the jurisdiction to inform the regulatory body of their intent to resign as Management Company and Company Secretary of VCH and were no longer to represent the entity “in any capacity”. In their letter, they specifically state the reasons to be the “risks associated with the new Group Structure [that] falls beyond Lemeul’s business risk appetite.”
Letter signed by Lemeul’s CEO Valerie Jean Christophe Azor on 10th December sent to the FSC terminating the management company’s administration of Village Corp Holdings Ltd on the grounds “..the risks associated with the new Group Structure falls beyond Lemeul’s business risk appetite.”
In response, VCH was transferred out of Mauritius to Switzerland in May 2022, leaving accounting fees unpaid to Lemuel according to publicly available records. The company’s files are still in Lemuel’s possession by default. In an email exchange with investors on 10th June 2022, VCH’s main shareholder and Managing Director and the man at the centre of the entire VCG renewable energy project, Norman Beaulieu, a U.S. citizen openly admits that one of the main reasons for migrating the holding company was indeed to escape scrutiny in Mauritius for having placed Edward Akufo-Addo onto the shareholder VCH structure. “By way of likely needing a clean legal opinion on the Holdco [VCH], we are concerned that this issue with the PEP may create a problem, even though it was properly dealt with, it is still a potential issue which we will not have in Switzerland.”
There is an inference in this statement that Edward Akufo-Addo’s shareholding might have been transferred to the new and current jurisdiction as well.
Communication from Norman Beaulieu, MD of VCH and VCG sent to investors in a private group chat in December 2022.
VCG’s ties to the previous government appear to run deep. Through an intermediary, Kofi Appenteng, a man with a respectable public profile in the U.S. as CEO of the Africa-America Institute and also VCG’s joint-second largest shareholder, Mr Beaulieu met with then President Nana Akufo-Addo in November 2017, according to a quarterly report to investors. The meeting included Edward Akufo-Addo and the Executive Secretary of the President, Nana Bediatuo Asante, who the quarterly claims is also VCG’s attorney in Ghana. VCG was deemed to be of such beneficial importance that “license applications, permits, etc. [would] now come from the Office of the President to help expedite the process to developing the project since it creates more jobs and opportunities than other renewable energy projects and this directly aligns with the main focus of the President’s agenda for 2018 and beyond.”
Dear All:
We have had a very positive and productive year in bringing our first project to reality, which I highlight below. Overall, we can target a Q4 2018 as our financial close for this first project.
Excerpt from a quarterly report sent by Norman Beaulieu to investors in December 2017 – P.2
Edward was originally placed on the Board of Directors of VCG as far back as June 2016 before his brother Nana became President in January the following year. But it was evident by July 2021 that he was quietly dropped in the following years. He did not appear in a company search 2 years later. It is more than likely that he was removed from the company structure of the Ghanaian entity, VCG, after his brother’s presidential accession, making Edward Akufo-Addo ineligible to be on the board as a close family member. If this is the case, then the potential problems of making Edward Akufo-Addo – a clear and risky PEP by October 2021- a shareholder of VCH in the Mauritian manifestation of the investment vehicle VCH are more than likely to have been known by Beaulieu at the very least.
P.4 of the VCG Project Summary and Promotional material for the project in June 2016. The Management Structure lists Edward Akufo-Addo on the Board of Directors of the company registered in Ghana.
Why add Edward, and to what benefit did this bestow on the project?
What is intriguing is the timeline of events leading up to Edward’s investment in VCH. In private communications, Mr Beaulieu concedes that it should have taken place a year earlier but was delayed because of Edward Akufo-Addo’s hospitalisation due to complications over covid. Had he been installed as a shareholder in October 2020, a year earlier, that would have made Edward a shareholder in VCH about the same time as the 20-year PPA license was issued. Again, at a time when Ghana was oversupplied.
Environmental Protection Agency Licenses for VCG
The awarding of the EPA licenses necessary for the construction of the biomass plant and separately for the farming systems in Ghana appears to have been obtained without due process being observed. Licenses that were obtained according to the VCG July 2021 project summary and issued to investors. It was made clear in a feasibility report, conducted by Recast Energy, a U.S. company based out of Richmond, Virginia and necessary if the bulk of funding was to be secured, that VCG needed to establish land ownership of the power plant and faming sites in question and show that had bought or leased the land from the registered landowners.
In a Memorandum of Understanding signed in May 2019 between VCG and the Traditional Council that administers affairs for the Akyem Abuakwa Kingdom, it was agreed that the Kingdom would “provide” 10,000 hectares to VCG that would in turn lease out the land to the 5000 smallholder farmers.
Memorandum of Understanding between the Akyem Abuakwa Traditional Council and Village Corps Ghana Ltd: taken from the Recast Energy LLC Feasibility Final Report P.739-742
But whether the Traditional Council had the right to provide the land in the first place is moot. The Recast Energy feasibility report raised red flags regarding this issue on two occasions. A further study conducted by Form International and its local offshoot, Form Ghana, tasked to provide a separate report on the viability of farming systems stated that, “Lands commissions will need to verify land ownership status of the farm sites selected. A 20 year land right should be the minimum to guarantee for the final plots selected.”
Further on, the report went on to note the reservations held by stakeholders on the issue of land ownership, “since most of the lands are regarded as wasteland, the issue of ownership is not seen to be critical. However, the status of land after reclamation was raised by many of the stakeholders consulted. It is an imperative for VCG to gain a deeper understanding of such concerns and how PAPs [Project Affected Person] may be affected in the future and ensure a clear procedure for dealing with land status.” The land commissions were never set up and as far as the investigation has ascertained, the EPAs were granted without clearly establishing land ownership of the 10,000 hectares in question. A project meant to help the local community could in theory, become a potential nightmarish land grab, only benefiting those at the very top of the Akyem Abuakwa Kingdom’s hierarchy.
Right now, the project appears to be dormant, if not dead and buried. And in terms of monies lost, it mostly falls on the small investors, some who lost sizeable portions of their life savings in the project. Based in South Africa, the United Kingdom, United States and Ghana investors were attracted by the perfect combination of investing in a renewable energy company in a developing country while making a decent long-term return. All the while bringing benefit to communities in the west African country and contributing positively to climate change. But they were left with unanswered emails and increasingly unsatisfactory explanations from Norman Beaulieu as to how their money was being put to use. This was set against the background of high burn rates, an eye-opening portion of which seems to have gone on Beaulieu’s personal remuneration and travel expenses. While he doesn’t appear to make accounts available to investors, Beaulieu admitted being USD$95,000 for the first 5 months of 2018. Averaging USD$18,000 per month.
Excerpt from a quarterly report sent by Norman Beaulieu to investors in December 2017 – P.4
By June 2022, just after VCH had been migrated to Switzerland, Beaulieu claimed there was “zero cash” left in a group email to investors.
VCG and its offshore investment vehicle, VCH, while small in comparison to other scandals such as PDS, certainly add to a wider picture of irregularities and inappropriate behaviour surrounding ECG that goes right to the top of the previous government and the energy sector as a whole. Certainly, in the current climate, it warrants further investigation.
The first port of call would be Energy Minister Jinapor. In February, he set up a committee to investigate the fraud at Tema Port. Their remit could be expanded to investigate other dubious activity in the energy sector. If any further action is needed, the case could then be referred to one of the three bodies tasked to investigate and prosecute President Mahama’s comprehensive anti-corruption drive: namely the Office of the Special Prosecutor (OSP) and supported by the National Intelligence Bureau (NIB) and the AG’s office. Jinapor has already shown intent when in April, he formally requested that the NIB investigate 1357 missing containers imported by ECG at Tema Port.
If Ghana, indeed Africa as a whole, is ever to escape the constant cycle of corruption, malpractice and debt, every misdeed at whatever level of government must be brought to light and action taken. Only then will those so eager to indulge just might, for a moment, hesitate in future.