[ 2016-09-01 ]

Government begins payment of energy sector debts
Government has made the first tranche of payment
to clear part of the debts owed by Volta River
Authority (VRA) to the commercial banks.

The finance Minister Seth Teckpe disclosed this on
Wednesday at a news conference to give an update
on the payment of the debts.

The GH¢250 million payment was said to have been
made into a separate account at the Bank of Ghana
(BoG) Wednesday.

The payment is part of a GH¢4.4 billion of VRA's
debt which will be paid over a five-year period.

According to government, the arraignment with the
banks has been done in a way that will also see
that the interest to be paid on the Ghana
component of the debts is reduced to 22 percent
from 30 percent while the interest of the dollar
component has also been reduced to 11 percent to
8.50 percent.

Payments will also be funded from a debt service
account which will receive a cash flows from an
energy debt recovery levy and a debt service
reserve and a proportion of VRA's receivables.

Even though government was silent on the current
Tema Oil Refinery (TOR) debts, there is also a
plan to institute an arraignment that could see
Government issue a 10-year bond to pay the TOR
debts, which will be arraigned by four banks.

However, on the Bulk Oil Distributors, government
maintained that it is still working to establish
the true state of the debts.

President of Ghana Association of Bankers,
Alhassan Andani tells JOYBUSINESS the arraignment
has the full backing of the association, adding
that disbursing of the first payment will start
from tomorrow September 1.

Chief Executive of the Volta River Authority, Kirk
Cofie, is optimistic, the deal will put the state
power generating firm on the strong footing going
forward .

Source - Joy Business

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