Ghana Debt Stymies Gas Economy

State-owned Ghana Gas's finance chief Emmanuel Essel said August 4 that his company is suffering from the inability of the Volta River Authority (VRA) to pay what it owes them. According to the official who was expressing himself during a press conference, this could threaten Ghana power supplies. 

At May 31, 2017, state-owned power generator VRA owed Ghana Gas $534.2mn, of which only 3% had been paid.  Meanwhile, the public gas utility itself owes $162.5mn to state-owned producer GNPC. Ghana Gas supplies natural gas to the VRA as feedstock for its various plants. 

VRA too admits that it has issues paying what it owes to ECG, the country’s power utility, because of problems recovering debts from customers.

The Ghanaian government, in a bid to overcome this challenge, earlier this year created a holding fund for all receivables in the power generation sector.

Ghana Gas CEO Dr. Ben Asante urged all concerned parties to make efforts to ensure that the nation meets all its objectives in the power sector. But it looks like power outages will get worse in the medium term -- as at least two LNG import projects in Ghana, including one at Tema, are now delayed.

Ghana's Jubilee oilfield is expected to shut for repairs lasting up to 8 weeks in late 2017 (according to operator Tullow late June, repeated Aug.7 by partner Kosmos Energy in its 2Q results) thus halting associated gas flows to shore during that shutdown, before gas starts flowing from the new Eni-operated OCTP oil and gas field, and at a time when the Tullow-operated TEN oil and gas field is only able to supply a limited amount of gas to shore.

VRA was originally formed in 1961 as a hydro-electricity generator but has expanded its role since to other forms of power generation.

Olivier de Souza