Ministry of Finance has confirmed that it is making progress towards settling the $134 million judgement debt owed to oil conglomerate Trafigura.
In a statement, the Ministry assured that it has initiated the required actions to resolve the payment matter.
“We have made the necessary arrangements to pay off the outstanding claims agreed with Trafigura after several rounds of negotiations,” the statement read, reassuring the public that the government remains committed to honouring its obligations.
This follows a petition from Trafigura, raising concerns and threatening to seize Ghana’s assets in South Africa if the $111 million arrears are not paid.
In a letter to Finance Minister Dr. Adam Amin, Trafigura urged the government to settle the debt by the end of the week to prevent further legal action, while expressing a preference for a peaceful resolution.
The company has already seized one of Ghana’s significant commercial properties, Regina House in London, due to the government’s failure to pay a $134 million judgement debt.
This debt originated from the termination of a power purchase agreement, which sparked a legal dispute between Trafigura and the Government of Ghana.
Oil company Trafigura has appealed to Ghana’s Finance Minister, Dr. Mohammed Amin Adam, demanding payment of a judgment debt owed by the government.
The firm has threatened to confiscate Ghanaian assets in South Africa if the debt is not resolved.
Trafigura has already seized control of Regina House, a prime Ghanaian-owned property in London, after the government defaulted on a $134 million judgment debt.
This liability originated from the cancellation of a power purchase agreement, which resulted in a legal conflict between Trafigura and the Government of Ghana.
For the past four years, Trafigura has attempted, without success, to collect payment from the government, leading to a U.S. court ruling that granted the company an extra $111.4 million in unpaid interest.
In petition, the energy company asked for immediate payment and cautioned that it would pursue additional legal measures to recover the funds if the government does not meet its obligations.
The petition, submitted to the Finance Ministry on September 23, conveyed the firm’s frustration with the government’s prolonged delay in settling the debt, despite several efforts to negotiate a resolution.
The debt traces back to January 26, 2021, when a UK tribunal determined that Ghana had violated its contractual obligations by terminating a power purchase agreement with the foreign energy company GPGC in 2018.
The tribunal awarded GPGC $134 million in compensation, which included interest and arbitration costs. Despite the ruling, Ghana only made partial payments, leaving a significant portion unpaid.
In January 2024, GPGC took the matter to the U.S. District Court, aiming to recover the remaining balance under the New York Convention.
Although Ghana was notified of the lawsuit, it missed the response deadline. The court, citing Ghana’s waiver of sovereign immunity and acceptance of international arbitration, ruled in favor of GPGC.
As a result, post-judgment interest was added to the debt, intensifying Ghana’s financial difficulties in settling the amount owed.
Oil conglomerate Trafigura has petitioned Ghana’s Finance Minister, Dr. Mohammed Amin Adam, over a judgment debt owed by the government, threatening to seize Ghana’s assets in South Africa if the debt remains unsettled.
In its petition submitted on September 23, the energy firm requested an immediate settlement and warned of further legal action to recover the funds if the government fails to comply.
The petition expresses frustration over the government’s delay in resolving the debt, despite multiple attempts at negotiation.
“We would nevertheless like to reiterate the message of our previous correspondence, that we would prefer not to take any further enforcement action and instead to resolve the matter amicably by fully executing the settlement agreement, as soon as possible, ideally within this week, and receiving payment in accordance with the agreed schedule,” the letter read.
Per the letter in question, it is not public knowledge of the exact assets in South Africa that the company seeks to secure.
Reports indicate that Ghana’s Regina House in London, one of the nation’s key commercial properties, has been taken over by Trafigura’s Ghana Power Generation Company (GPGC) due to the government’s failure to settle a $134 million judgment debt.
This development follows a prolonged four-year effort by Trafigura to recover funds after Ghana abruptly terminated a power purchase agreement with the energy firm. Despite repeated attempts to secure payment, Trafigura was forced to obtain a ruling from a U.S. District Court, which added $111.4 million in mandatory interest to the arrears, compounding Ghana’s debt and exacerbating its financial obligations.
Bright Simons, the Vice President of Imani Africa, revealed on the social media platform X (formerly Twitter) that Regina House has been placed under receivership by Trafigura, an assertion later confirmed by Joy News. Simons claimed that this information had been concealed by the Ghanaian government, stirring further controversy.
In an interview with Joy News, Ghana’s High Commissioner to the United Kingdom, Papa Owusu-Ankomah, acknowledged that Trafigura will remain in control of Regina House until the full debt is settled.
He urged for renewed negotiations to avoid further financial penalties, stating, “Until we pay in full or come into an arrangement to pay them, Trafigura will remain in control over the receivership of the Regina House and its proceeds.” He also admitted that Ghana is facing severe financial challenges.
The legal dispute began on January 26, 2021, when a UK tribunal awarded GPGC $134.3 million after determining that Ghana had breached its contractual obligations by terminating a power purchase agreement on February 18, 2018.
Although Ghana argued that GPGC failed to meet certain contractual conditions, the tribunal disagreed, awarding GPGC damages based on an Early Termination Payment formula. The tribunal’s award included an interest rate of six-month USD LIBOR plus 6% and reimbursement of GPGC’s arbitration costs amounting to $3.3 million. Although Ghana made partial payments totaling $1.89 million, a significant balance remains unpaid.
In a bid to recover the remaining funds, GPGC filed a case in the U.S. District Court in January 2024 under the New York Convention, seeking to enforce the arbitral award. Ghana failed to respond to the court’s petition and missed the March 29, 2024 deadline, leading to a ruling in GPGC’s favor.
Chief Judge James E. Boasberg confirmed that the U.S. court had jurisdiction under the New York Convention, which requires member states to recognize and enforce arbitral awards, regardless of location or nationality.
While the U.S. court did not grant pre-judgment interest, it awarded post-judgment interest at a rate specified under U.S. law, further increasing Ghana’s financial burden. As a result, Trafigura now controls Regina House until Ghana can resolve the debt crisis.
Ranking Member on Parliament’s Energy Committee, John Abdulai Jinapor, has accused President Akufo-Addo of canceling the power purchase agreement with Trafigura’s Ghana Power Generation Company (GPGC) as a form of personal retribution.
Jinapor claims that the decision to terminate the contract was motivated by a desire to send a message to a specific individual who had allegedly crossed the President.
He argues that, ironically, the Akufo-Addo administration then entered into a similar agreement with a different company, suggesting a questionable reversal in policy.
Speaking on Joy FM’s Top Story on Thursday, August 22, he said “I am telling you that this termination was because of a family feud between some family members of the president on one hand and the other.
“When we assume office, you will get to know the real truth and the rationale behind the termination. They did not terminate the contract because they had Ghana’s interest at heart.
It is because they wanted to teach somebody a lesson. They extended their own family problem into governance and terminated this contract and today you and I [are paying for it],” he said.
Mr. Jinapor conveyed his frustration, highlighting that the new National Democratic Congress (NDC) administration will inherit a complex array of problems.
This sentiment followed the recent acquisition of the Regina House in London by Trafigura, a consequence of Ghana’s failure to settle a $134 million debt.
Trafigura has been attempting for four years to collect this payment from the Ghanaian government after an abrupt termination of a power purchase agreement.
The ongoing legal struggle culminated in a U.S. court issuing an additional judgment that tacked on $111.4 million in interest, thus increasing the total debt owed by Ghana.
Ghana’s Regina House in London, one of the nation’s key commercial properties, has been taken over by Trafigura’s Ghana Power Generation Company (GPGC) due to the government’s failure to settle a $134 million judgment debt, according to reports from JoyNews.
This development follows a prolonged four-year effort by Trafigura to recover funds after Ghana abruptly terminated a power purchase agreement with the energy firm.
Despite repeated attempts to secure payment, Trafigura was forced to obtain a ruling from a U.S. District Court, adding $111.4 million in mandatory interest to the arrears. This legal outcome compounded Ghana’s debt, exacerbating its financial obligations.
The Vice President of Imani Africa, Bright Simons, revealed on social media platform X (formerly Twitter) that Regina House has been placed under receivership by Trafigura, an assertion later confirmed by Joy News. Simons claimed that this information had been concealed by the Ghanaian government, stirring further controversy.
In an exclusive interview with Joy News, Ghana’s High Commissioner to the United Kingdom, Papa Owusu-Ankomah, acknowledged that Trafigura will remain in control of Regina House until the full debt is settled. He urged for renewed negotiations to avoid further financial penalties, stating, “Until we pay in full or come into an arrangement to pay them, Trafigura will remain in control over the receivership of the Regina House and its proceeds.” He also admitted that Ghana is facing severe financial challenges.
The legal dispute began on January 26, 2021, when a UK tribunal awarded GPGC $134.3 million after determining that Ghana had breached its contractual obligations by terminating a power purchase agreement on February 18, 2018. Ghana had argued that GPGC failed to meet certain contractual conditions, but the tribunal disagreed, awarding GPGC damages based on an Early Termination Payment formula.
The tribunal’s award included an interest rate of six-month USD LIBOR plus 6% and reimbursement of GPGC’s arbitration costs amounting to $3.3 million. Although Ghana made partial payments totaling $1.89 million, a significant balance remains unpaid.
In a bid to recover the remaining funds, GPGC filed a case in the U.S. District Court in January 2024 under the New York Convention, seeking to enforce the arbitral award. Ghana failed to respond to the court’s petition and missed the March 29, 2024 deadline, leading to a ruling in GPGC’s favor. Chief Judge James E. Boasberg confirmed that the U.S. court had jurisdiction under the New York Convention, which requires member states to recognize and enforce arbitral awards, regardless of location or nationality.
While the U.S. court did not grant pre-judgment interest, it awarded post-judgment interest at a rate specified under U.S. law, further increasing Ghana’s financial burden. As a result, Trafigura now controls Regina House until Ghana can resolve the debt crisis.
This latest development has raised questions about Ghana’s financial stability and the management of its international obligations as it continues to navigate economic challenges.
IMANI Africa’s Honorary Vice President, Bright Simons, has revealed that the government now faces an additional $112 million payment to a subsidiary of Swiss energy trading giant, Trafigura, due to mounting interest on an unresolved judgment debt.
“Despite paying nearly $100 million of the original judgment debt, which was less than $140 million, the outstanding balance remains over $112 million today and continues to rise daily,” Mr Simons wrote.
He criticized the government’s approach, noting that the decision to stretch out the payment schedule is exacerbated by the high interest rate.
“The interest at that time was about 6.2%. Today, it would have been more than 11%,” Mr Simons revealed.
The judgment debt stems from a dispute between the Ghanaian government and the Ghana Power Generation Company (GPGC), a subsidiary of Trafigura, over a power purchase agreement that Ghana unilaterally terminated in 2018.
In 2015, the government entered an agreement with an Italian-owned company, Ghana Power Generation Company (GPGC), with the goal of producing 107 megawatts of electricity between two plants.
GPGC proceeded to court and in January 2021, an arbitration panel in London ruled in favour of GPGC, ordering Ghana to pay $134,348,661 in damages. Despite partial payments, Ghana still owes over $111 million, with interest continuing to accumulate.
Mr Simons pointed out that Ghana’s failure to meet critical deadlines to appeal the UK tribunal’s ruling has worsened the situation.
The District of Columbia Court in the U.S. recently ordered Ghana to pay the outstanding amount plus post-judgment interest after GPGC sought enforcement of the judgment.
IMANI’s Vice President also emphasized that the events leading to the termination of the contract and the government’s subsequent handling of the arbitration raise serious concerns about governance and accountability in Ghana.
“The chain of events… raises critical concerns about the quality of governance and accountability in Ghana,” he stated in his article.
Ghana’s Attorney General and Minister of Justice, Godfred Yeboah Dame, has clarified the situation, stating that no new judgment has been made against Ghana by a U.S. court.
During an interview on Citi FM on August 21, 2024, Mr. Dame explained that the $134 million award was given in 2021, and the government has been working to meet its payment obligations since then.
“It is the failure to exhaust payment which has led the company to seek enforcement orders in other jurisdictions,” Dame clarified, adding that there has been no fresh judgment against Ghana.
“It is only an enforcement order… due to a failure to pay a judgment debt that accrued way back in January 2021,” he said.
Member of Parliament for North Tongu, Samuel Okudzeto Ablakwa, has declared his intention to initiate proceedings to summon the Finance and Energy Ministers, as well as the Attorney General, to appear before Parliament.
This move comes in response to the release of GH¢230 million to settle a judgment debt owed to Trafigura.
Trafigura, the primary owner of Ghana Power Generation Company (GPGC), was awarded this sum in January 2021 following a ruling by an arbitral tribunal in London.
The tribunal determined that Ghana had unlawfully terminated a contract for the installation and operation of two power plants. Consequently, the government was directed to pay $170 million to Trafigura, with the possibility of losing its assets through auctioning if the payment was not made.
To initiate the payment process, the government has released $20 million. In an interview with Citi News, Samuel Okudzeto Ablakwa, the North Tongu legislator, expressed his intention to seek answers from the Finance and Energy Ministers, as well as the Attorney General, regarding this matter.
“Our oversight role in terms of summoning these ministers and finding out why they created this, and seeing if there can even be a vote of censure, failed the last time we tried that because we did not have the two-thirds majority.”
“But we will not give up, and we have already served notice that we are going to pursue this matter because this is such a colossal amount of money wasted, and people must answer questions. You can’t waste all of these resources which could have been used to build roads, hospitals, solve our water problems, and address our housing challenges for displaced persons. So, I can assure you that we are not going to be derelict on this matter.”
The Attorney General and Minister for Justice, Godfred Yeboah Dame, is leading a government negotiation team in discussions with the Singaporean commodity trading firm Trafigura, according to one of his deputies, Diana Asonaba Dapaah.
The goal is to establish a payment plan to settle a $140 million judgment debt awarded to Trafigura by a London court.
This judgment allowed Trafigura the right to seize and auction Ghana’s assets in the United Kingdom following the cancellation of a power purchase agreement in 2017. Property associated with the Ghana International Bank in London has already been earmarked for potential auction.
Deputy Attorney General Diana Asonaba Dapaah has reassured the public that the Attorney General is overseeing the situation and that all state assets in the United Kingdom are secure.
In an interview on JoyNews, she said: “We are working on it because there is a lot that goes with litigation including settlement and I believe that very soon, we should be able to give you some good news on the outcome of Trafigura.
“We are clearly on top of it. The Attorney General has been to the UK to help resolve the matter in the best possible way which would be mutually beneficial to all parties involved,” she added.
Recently, Ghana’s High Commissioner to the UK and Ireland, Papa Owusu-Ankoma, disclosed that the Ministry of Finance has made substantial advancements in achieving a resolution.
While he acknowledged the unfortunate circumstances that led to Trafigura’s action, he emphasized that concerted efforts are in progress to address the situation.
“We will not get to that stage where these assets will be sold to defray the debts, because of progress made on reaching a settlement”, he said on JoyNews on November 2.
In the midst of government negotiations to resolve the matter, former Energy Minister Dr. Kwabena Donkor is urging President Akufo Addo to initiate an investigation into the issue.
The Pru East MP argues that the provided explanations are insufficient and suggests that a comprehensive presidential inquiry, in addition to a parliamentary probe, can provide valuable insights for Ghana’s future while holding accountable those responsible for any wrongdoing.
“First of all, I call for two inquiries – one at the level of the presidency. The president must institute an internal inquiry to unravel what led to this. The cabinet is advisory to the president and not the final decision-maker of the land in terms of executive power.
“Cabinet is advisory to the president so the president in cabinet is a different business because then the president has the power. That is why I am calling on the president to institute an internal inquiry for two reasons – to know where we really went wrong in terms of the process and what lessons we have to learn as a nation at the level of the executive to avoid a recurrence going forward,” he said.
“Another inquiry at the level of the legislature since the decision to terminate was taken by the executive arm of government, it is the legislature that has oversight responsibility over the executive,” he added.
Former Energy Minister Boakye Agyarko has vehemently expressed his disapproval of remarks made by former Minister of Power, Dr. Kwabena Donkor. Dr. Donkor with regards to the recent $140 million judgment debt the country is dealing with.
The termination of an agreement between Ghana Power Generating Company (GPGC) and the New Patriotic Party (NPP) administration, led by then-Energy Minister Boakye Agyarko has resulted in a judgment debt of $140 million awarded to Singaporean firm Trafigura, the majority owner of GPGC.
Dr Donkor, in his comments, suggested that a thorough investigation should be conducted into all officials from the New Patriotic Party (NPP) administration who played a role in the termination of the power purchase agreement with the Ghana Power Generating Company (GPGC).
“It was very avoidable as I have always said. Let me quickly say this. This was the cheapest of all the emergency power plants in terms of cost. It was also the shortest because it was for four years. There was no requirement for the government of Ghana to put down a guarantee, and then again the total capacity charge made of capital recovery, fixed ONM, and non-fuel variable ONM came to 4 cents per kilowatt hour. It was the cheapest at the time of all the emergency power plants we brought in, and so it couldn’t have been on the basis of cost.”
Dr. Kwabena Donkor further clarified that the government’s assertion that GPGC failed to obtain siting and construction permits is not a valid argument. He explained that the responsibility for obtaining these permits was shared between the state and the company, as outlined in the contract.
Reacting to his statements, Mr Agyarko expressed his disappointment with Dr. Donkor’s comments, deeming them “unfortunate and ill-informed.”
Mr Agyarko clarified the circumstances surrounding the decision to review the Power Purchase Agreements (PPAs), emphasizing that “Upon assumption of office, the newly elected NPP government decided to take all the necessary actions to contain the cost of power generation and distribution in Ghana. It became necessary to review the implementation of the many Power Purchase Agreements (PPAs) because should all of them be implemented as originally scheduled, it would result in the production of excess energy with its attendant cost, which would worsen the financial situation of the power sector. The review was therefore to help cut back on losses that would be incurred.”
In a statement, he added: “An Inter-Ministerial Committee was set up under the chair of the Energy Commission to review the fiscal and legal implications of Power Purchase Agreements (PPAs) executed by the Electricity Company of Ghana (ECG). The eighteen (18) member committee was chaired by Dr. Alfred Ofosu Ahenkora, Executive Secretary of the Energy Commission. Its report was submitted on 5th April, 2019 under ref EC/MOE/17.
“The report was subsequently put before Cabinet for consideration and action. Cabinet directed that the report be further reviewed by the Attorney-General. This was done. Cabinet subsequently gave its approval for the recommendation of the report to be implemented.”
A Senior Research Associate at IMANI Africa, Dennis Asare, believes that the $140 million Trafigura judgment debt could have been avoided.
He also placed blame on the Attorney General’s office for advising the government to terminate the power purchase agreement with the Ghana Power Generating Company (GPGC), a subsidiary of Trafigura.
In 2017, the government acted on the advice of the Attorney General and terminated the agreement due to high tariffs, which they claimed would have cost the state $115,480,000.
Other reasons cited included alleged illegality, lack of capacity for GPGC to enter into a Power Purchase Agreement, failure to obtain necessary permits, and the installation of used plant contrary to policy.
However, according to the IMANI Research Associate, with proper due diligence, the government could have avoided this debt, which now threatens to cost the country some of its assets in the UK.
“You could see that at every point in time, the IPP was trying to find a way to ensure that this agreement went through but the government had already decided from the Power Purchase Agreement Committee’s report that this one must be terminated.
“And so they were looking for opportunities right within the agreement to get off this deal. And you can say it is part of our poor planning as well as the ill advice from the Attorney-General’s office. I see that this is a cost that could have been avoided,” he told JoyNews in an interview.
The Ghana High Commission building in the UK, which houses visa and other services, the commissioner’s residence, the Ghana International Bank building, and other properties are in jeopardy of being auctioned to settle a $140 million judgment debt awarded to Singaporean firm, Trafigura.
Trafigura, the majority owner of the power company GPGC, obtained the award in January 2021 following a London arbitral tribunal’s finding that Ghana had unlawfully terminated a contract for the installation and operation of two power plants.
While the government asserts that the Finance Ministry is taking steps to settle the debt, Ghana’s High Commissioner to the United Kingdom, Papa Owusu Ankomah, attributes the default to the government’s financial constraints.
Dennis Asare points out that since the ruling was made in 2021, the government had ample time to negotiate a payment plan with Trafigura. The government’s current denial puts several crucial assets of Ghana, including Regina House, which houses the International Bank of Ghana, at risk.
“We had the opportunity to negotiate and plan how to pay out the debt and we’ve not been able to do that and currently there is no fund available in terms of mitigating some of the judgement debts that may arise out of the termination of contracts,” he stated.
Former Power Minister during the John Mahama administration, Dr. Kwabena Donkor, has called for a parliamentary inquiry into the termination of the power purchase agreement between the Ghana Power Generating Company (GPGC) and the New Patriotic Party (NPP) administration, led by then-Energy Minister Boakye Agyarko.
The termination of this agreement resulted in a judgment debt of $140 million awarded to Singaporean firm Trafigura, the majority owner of GPGC.
The judgment debt has put several valuable properties at risk of being auctioned to satisfy the award. This includes the Ghana High Commission building in the UK, the commissioner’s residence, the Ghana International Bank building, and others.
The dispute stems from the government’s decision to cancel the contract for the installation and operation of two power plants. The government cited high tariffs, legality concerns, and other issues as reasons for terminating the agreement.
However, Dr. Kwabena Donkor believes these justifications are not valid. He contends that the GPGC deal was the most cost-effective and brief among all the power purchase agreements signed at the time and that the judgment debt could have been avoided.
In light of this, he calls for a parliamentary investigation into the actions of the former Energy Minister and other officials responsible for the termination.
“It was very avoidable as I have always said. Let me quickly say this. This was the cheapest of all the emergency power plants in terms of cost. It was also the shortest because it was for four years. There was no requirement for the government of Ghana to put down a guarantee, and then again the total capacity charge made of capital recovery, fixed ONM, and non-fuel variable ONM came to 4 cents per kilowatt hour. It was the cheapest at the time of all the emergency power plants we brought in, and so it couldn’t have been on the basis of cost.”
Dr. Kwabena Donkor further clarified that the government’s assertion that GPGC failed to obtain siting and construction permits is not a valid argument. He explained that the responsibility for obtaining these permits was shared between the state and the company, as outlined in the contract.
“Every contract, at least power contracts, contain conditions for termination. My worry at the time and I raised the alarm, was that the letter signed by the then Energy Minister Boakye Agyarko, stated that Trafigura or the Ghana Power Generating Company [GPGC] which was the subsidiary we had signed the contract with, had not obtained all the necessary Energy Commission permits.
“In the Power Purchase Agreement, one of the obligations of the government of Ghana was to assist the contractor obtain all relevant government of Ghana permits. And so if we turn around to use that as the basis for termination it creates a problem for all of us.”
Although acknowledging the government’s authority to terminate agreements at its discretion, he noted that the state did not adhere to proper procedures in canceling the contract.
“Let me concede that the government of the day can decide to terminate any contract, but there are consequences for termination. And in all agreements, there are conditions and processes for termination, and so if you do not follow the processes and conditions, particularly if the termination is not justified as ruled by the arbitration panel, then we are in trouble, and this is exactly what has happened,” he insisted.
He added “If we had negotiated the termination, we could have even taken ownership of the equipment. Unfortunately, even after the court had ruled, we went to sleep. Trafigura is still doing business in Ghana, and therefore we had some leverage at least in negotiating a payment plan, but all the way from 2021 we went to sleep.”
The Member of Parliament for Pru East dismissed the government’s justification that the power plants were used or outdated, asserting that this information was openly available. He further contended that the GPGC plant was not the only previously owned plant acquired by the country.
“Yes, it is used equipment and it was known at that time. It was not the only used equipment that was brought in. The AKSA plant was also used, it wasn’t new. And so, for AKSA we signed a 5-year agreement, and the government has found it necessary to extend this agreement for another 10 years, so the question of the equipment being used is neither here nor there.”
The lawmaker is calling for those accountable for the contract termination to respond to crucial inquiries.
“I believe the Ghanaian state should ask the people who took the decision to terminate to tell us why they terminated. I believe that is the route to use if we have to improve our governance. Those who were responsible would have to tell us why they took that decision because commercially, and legally it doesn’t make sense.”
“Even from an energy perspective, you don’t terminate the cheapest emergency plant you have. And then if you say it was an old plant, we knew it. AKSA was also an old plant, we signed for five years as an emergency plant, but this government has gone ahead to extend it for a further ten years. And so if you add all these, we find it extremely difficult to justify. Maybe Hon. Boakye Agyarko who signed the letter may be able to tell us what some of us don’t know.”
“I believe parliament is the best institution to do that because the decision to terminate was taken by the executive arm, and so you cannot ask the executive arm to investigate it. Ghanaians must know why, we have the right to know,” he added.
