The Government of Ghana has reaffirmed its commitment to settle an outstanding USD111 million judgment debt owed to oil giant Trafigura, following concerns about delayed payments raised on social media.
The debt stems from a power purchase agreement dispute that has escalated to threats of asset seizure in South Africa and the United States.
Responding to a petition from Trafigura’s subsidiary, the Ghana Power Generation Company (GPGC), in a statement issued last week, the Ministry of Finance assured that arrangements had been made to clear the debt.
This assurance followed Trafigura’s warning that further delays could prompt the seizure of Ghanaian properties abroad.
“We have made the necessary arrangements to pay off the outstanding claims agreed with Trafigura after several rounds of negotiations. We are surprised at the circulation of this letter on social media.
“The Government of Ghana remains committed to honouring its obligations under the Settlement Agreement with Trafigura to bring this matter to closure,” the Finance Ministry’s statement said.
The dispute dates back to a January 2021 ruling by a UK tribunal, which found the Government of Ghana liable for breaching a 2018 power purchase agreement with GPGC.
The tribunal awarded GPGC USD134 million, of which only USD23 million has been paid.
In August 2024, Trafigura briefly seized Ghana’s Regina House in London as part of efforts to recover the debt.
GPGC’s recent petition, which was also sent to Ghana’s Attorney General, Godfred Yeboah Dame, warned of further asset seizures if the outstanding balance is not settled.
Trafigura last week petitioned Ghana’s Finance Minister Dr. Mohammed Amin Adam over an unresolved judgment debt.
This warning comes in the wake of Trafigura’s acquisition of Regina House, a key commercial property in London, after government failed to settle a USD134 million judgment related to a terminated power purchase agreement.
The oil giant is threatening to seize state assets in South Africa if payment is not made.
The dispute dates back to a January 26, 2021 ruling by a UK tribunal, which found that Ghana had breached its contractual obligations by terminating its agreement with GPGC, a foreign power company, in 2018.
The tribunal awarded GPGC USD134 million in damages, covering interest and arbitration fees. Yet, despite the tribunal’s clear mandate, the government has only made partial payments, leaving a substantial sum outstanding.
Over the past four years, Trafigura has sought to recover the owed amount, leading to a U.S. court judgment that added USD111.4 million in interest to the original debt.
In a recent petition submitted to the Finance Ministry on Monday, 23 September 2024, the company expressed frustration over government’s prolonged delays in settling the matter, demanding immediate payment and warning of potential legal action if their requests are ignored.
Ghana’s failure to respond to the U.S. court ruling further complicates the situation, as it resulted in a judgment favouring GPGC based on Ghana’s waiver of sovereign immunity and commitment to international arbitration.
This has exacerbated the country’s financial obligations, hindering efforts to resolve the debt.
