John Jinapor
The President has instructed GNPC without parliamentary approval to borrow $431.5 million from LukOil International Trading and Supply Company (LITASCO SA). This money is to be used as follows;
1. US$155 million for the refinancing of LITASCO debt
2. US$150 million to settle the debt owed by the Government of Ghana (GOG) to Karpower
3. US$126.50 million to renew the Karpower bank guarantees.
This is an attempt to violate the laws of Ghana. It would be recalled that before Parliament went on recess, GNPC, as part of its work programme and budget for 2023 tabled for Parliamentary approval, a loan facility of $650 million.
The Committee on Mines and Energy considered this request and directed GNPC to submit the full terms of the loan agreement for consideration and approval in line with Article 181 of the 1992 Constitution.
The president unfortunately has decided to avoid Parliamentary scrutiny of the agreement.
By this action the President is effectively committing Ghana to yet another loan but this time, using oil from the TEN fields as collateral for over five(5) years.
This loan is being contracted at an interest rate of SOFR 1 Month + Margin, and a structured fee of 2.5% flat rate.
Also worth nothing is the fact that this shady arrangement is being routed through the tainted and controversial SPV called Jubilee Oil Holdings Limited (JOHL), from which government intends to rely on as a source of repayment instead of relying on proceeds from the Government of Ghana.
Apart from the clear breach of the laws of Ghana regarding approval of such loan agreements, the whole arrangement will further hinder GNPC’s ability to obtain the needed funds to focus on its core mandate, such as continuing the reconnaissance works on the Voltain Basin Project and fulfilling its cash call obligations.
The other challenge is that this agreement affects all participating interests held directly or indirectly by the Government of Ghana (GOG), including royalty entitlements.
The arrangement requires GOG to substitute cargoes from other interests held by Ghana should production volumes from the TEN fields prove insufficient to meet the minimum quantity.
This is a worrying development that Ghanaians must rise up and speak against. The country belongs to all of us and the laws of this country must be respected by all including the President.
John Abdulai Jinapor
MP, Yapei/Kusawgu
Ranking Member, Committee on Mines and Energy.
