It has been\u00a0confirmed that debts owed banks by\u00a0the Volta River Authority (VRA) alone are now in excess of 1.1 billion dollars, coming up to about 4.4 billion cedis.<\/p>\n
Documents seen by Citi Business News<\/strong> reveal that the state owned company’s indebtedness to a number of banks alone as at March, 2016 was about 1.1 billion dollars.<\/p>\n The figure is minus current interest, roll over fees and other charges and expected to run in excess of 2 billion dollars when these are added.<\/p>\n Documents available to Citi Business News from the VRA on its financial obligations reveal that the VRA is indebted to about 13 local banks in the country as well as other foreign financial institutions.<\/p>\n The banks include Ecobank, Stanchart, Unibank, Zenith bank, GT bank, UBA, UMB, CAL bank, ACCESS bank, Stanbic bank, Fidelity bank, Firs Atlantic bank Ghana International bank among others.<\/p>\n The debts were accrued following loans used to buy light crude oil and gas among other things.<\/p>\n Breakdown of banks debts<\/strong><\/p>\n Ecobank alone is owed 103,234,801 dollars, Stanchart about 80,573,682 dollars, Unibank 85,468,683 dollars, Zenith bank 30,110,510 dollars, Sahara Energy RES 170 million dollars.<\/p>\n While GT bank,\u00a0 UBA, UMB and CAL bank \u00a0are owned over 20 million dollars, 53 million dollars, 92 million dollars and 56 million dollars respectively.<\/p>\n The other banks, ACCESS bank, Stanbic bank, Fidelity bank, First Atlantic bank Ghana International bank are owed 39 million dollars, 31 million dollars, 13 million dollars, 31 million dollars and 6.6 million dollars respectively.<\/p>\n Other entities also owed are Ghana Gas and N- Gas of Nigeria which brings the total debt figure on the books of the VRA to about 1.5 billion dollars, culminating to 6 billion cedis.<\/p>\n Ghana Gas is owed 246 million dollars for the period between December 2014 to December 2015, while N- gas is owed 166 million dollars from August 2014 to January 2016.<\/p>\n A summary of the authority’s total outstanding exposure shows \u00a0776 million dollars is owed for outstanding light crude oil, outstanding gas invoices of 530 million dollars, short term facilities 33 million dollars, 120 million dollars medium term facilities and other trade liabilities\/overdrafts \u00a0of 78.53 million dollars.<\/p>\n Govt raises GHS 300m<\/strong><\/p>\n Yesterday 13th July, 2016, government announced that it had commenced \u00a0moves to raise GHS300 million from some domestic banks in the country to restructure the debt of the Volta River Authority.<\/p>\n A statement from the Ministry of Finance copied to\u00a0Citi Business News<\/strong>\u00a0explained that \u201cgovernment, acting through its Ministry of Finance and Ministry of Power is pleased to announce that it is progressing towards a successful conclusion in the restructuring of a substantial portion of the debts owed by the VRA\u201d.<\/p>\n The agreement when concluded is expected to comprehensively restructure VRA\u2019s balance sheet.<\/p>\n According to the statement, the Lenders were led by\u00a0representatives of the Ghana Association of Bankers\u00a0(\u201cGAB\u201d) and the Chief Executives of the Lending Banks in the negotiations with the Finance Ministry.<\/p>\n Final Restructuring packages<\/strong><\/p>\n As part of the final restructuring packages, the VRA was expected to undertake a rebate of 3.5% of the gross indebtedness\u00a0of the company to lending banks as at May 31, 2016.<\/p>\n In addition, there is an extension of the maturity of the Cedi and US dollar denominated components of the debt to a maximum of five (5) years, with an option to accelerate repayment within 3 years.<\/p>\n By this, the restructuring will allow government to achieve a maturity transformation (repayment period) from overdue status up to five (5) years.<\/p>\n Also, government has secured a reduction in the interest rate for the Cedi component to 22% per annum, from an existing average of 32%\u00a0 per annum \u00a0to be reviewed after six (6) months.<\/p>\n On the US dollar component of the debt, government has secured a reduction in the interest rate to 8.5% per annum from an existing average 11% per annum.<\/p>\n According to the statement, the VRA Legacy Debts totalling 2.2 billion cedis will be repaid from a special account opened to receive the proceeds accruing under the Power Generation and Infrastructure Support sub-account, under the Energy Sector Levies Act (ESLA, 2015).<\/p>\n By this, an estimated 50% of the proceeds\u00a0 are expected to be used to retire the debts pursuant to the restructuring of the debt.<\/p>\n \u201cGovernment will apply the other 50% of the proceeds under ESLA plus the current enhanced \u201cbusiness-as-usual\u201d receivables of VRA all of which is to be escrowed into a centrally-managed account to be used to service trade and other creditors of the power sector,\u201d the statement explained.<\/p>\n Govt applying ESL on purpose<\/strong><\/p>\n Commenting on the nature and terms of the restructuring package, Finance Minister, Mr. Seth Terkper stated that the Energy Sector levies are being applied as purposed and approved by the Parliament.<\/p>\n Mr. Terkper who doubles as the Minister of Power explained that the approach will ensure that there is absolutely no impact on the country\u2019s debt stock or further burden tax payers.<\/p>\n \u201cBy this arrangement the government is taking on its responsibility to support the power sector agencies including VRA, to fully repay all legacy debts owed to the domestic lending banks and trade suppliers,\u201d he said.<\/p>\n The immediate impact of this arrangement is to strengthen the balance sheet of VRA and enhance its ability to arrange more structured trade lines to support its day-to-day operations under a well-managed escrowed receivables structure, which will avoid build-up of further unsustainable debt.<\/p>\n He urged lending banks in the country to adopt the VRA debt restructuring arrangement which is also intended to relieve and improve the quality of their lending assets and the credit standing of the energy sector State-Owned Enterprises (SOEs).<\/p>\n –<\/p>\n By:\u00a0 Vivian Kai Lokko\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":" It has been\u00a0confirmed that debts owed banks by\u00a0the Volta River Authority (VRA) alone are now in excess of 1.1 billion dollars, coming up to about 4.4 billion cedis. Documents seen by Citi Business News reveal that the state owned company’s indebtedness to a number of banks alone as at March, 2016 was about 1.1 billion […]<\/p>\n","protected":false},"author":14,"featured_media":230899,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":[],"footnotes":""},"categories":[121,32],"tags":[],"class_list":["post-230894","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-and-finance","category-business"],"_links":{"self":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/230894","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=230894"}],"version-history":[{"count":0,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/230894\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/media\/230899"}],"wp:attachment":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=230894"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=230894"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=230894"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}