Ghana Gas Company incapable of refinancing CDB loan – CEO

Chief Executive Officer of the Ghana Gas Company, Dr Ben Asante has revealed that the facility is incapable of refinancing the $1 billion China Development Bank (CDB) loan acquired for its construction due to the Volta River Authority’s (VRA) indebtedness to the GGC.

According to the initial arrangements, the facility was expected to refinance the loan but the Volta River Authority is said to be owing Ghana Gas over $500 million, mainly because of the current substantial Energy Sector debt.

In an encounter with the media on Monday, Dr Asante disclosed that the Ministry of Finance will pay for the loan while efforts are being made to improve revenue collection from the Electricity Company of Ghana (ECG).

Dr. Asante said: “currently, the facility is not able to finance the loan. This is because VRA owes us, the Ministry of Finance is now paying for the loan”.

He emphasized that “going forward, [GGC is] going to ensure that the last entity in the [power supply] chain, ECG, which interfaces with the customers, improve their collection protocol. This will mean that they will improve their collection of money down the chain”- blaming the ECG for the inability to meet the loan refinancing need.

He the efficiency would directly reduce the chances for debt accumulation in the energy sector.

“That is what actually broke the chain. The fact that ECG hasn’t adequately collected whatever it is owed. I believe its inadequate collection of the revenue is the result of the rolling down of debt through GRIDCo, through VRA to those of us who actually supply them fuel”, he noted.

Dr Asante disclosed the ongoing partnership of government with all critical stakeholders in the energy value chain to ensure such occurrence doesn’t recur in the future.

The Ghana Gas Company boss reiterated the assurance of government through the Energy Ministry that, Ghana will not experience any power cuts during the shutdown of Tullow’s FPSOs since GGC has made adequate provision for gas storage to supplement supply for the period.

In his own words, “what we do is we try to store some gas within the pipe, gas is not like oil, where you can put in a tank, so we store the gas in the pipe at pressure, so it gives us some hours of supply before we actually go to zero flow. So we do try to make sure that we have some transient gas in the pipeline that we can use”.