Seth Terkper said on Wednesday that the government and commercial banks have entered into an agreement on road-map to clear the about 4.4 billion Ghana cedis (1.1 billion U.S. Dollars) debts.
These debts are owed by state-owned Volta River Authority (VRA), Tema Oil Refinery (TOR), Bulk Oil Storage and Transport Company Limited (BOST) and power distributor, Electricity Company of Ghana (ECG) to local banks.
“As I speak, the government has made an upfront payment of approximately 250 million Ghana cedis which will be funded by the new collections from the energy sector levies,” Terkper said.
In addition of the payments, the minister said the government had also negotiated for a reduction of interest rates on the foreign currency component of the VRA debts from an average of 11 percent to 8.5 percent.
The debts include letters of credit issued to the VRA and other public sector power companies for crude oil purchases to power the Ghana’s thermal plants, but could not be paid in time, dragging banks into distress.
According to the minister, steps would be taken to strengthen the VRA balance sheet to make the state-run power producer attractive for investment.
The government anticipates that this approach will be used to restructure VRA as well as the debt of other energy-sector state-owned enterprises, which will include improving the repayment of the “legacy debt” to ECG in the amount of 728 million cedis over five years. Enditem
Source: Xinhua/News Ghana