Gov’t Releases $20M For GPGC Judgment Debt
The government of Ghana has released funds for part payment of the US $164 million judgment debt judgment incurred over the termination of a power purchase agreement with the Ghana Power Generating Company (GPGC), a subsidiary of Singaporean firm Trafigura.
This was contained in a letter by the Finance Minister, Ken Ofori Atta dated November 14, 2023, and addressed to the Controller and Accountant General.
According to the letter, ₵230, 598,000.00 equivalent to US$20,000,000 was authorized for release for part-payment.
“You are hereby authorized to release the sum of GHc230,598,000.00 (Two Hundred and Thirty Million, Five Hundred and Ninety-Eight Thousand Ghana Cedis) being the cedi equivalent of US$20,000,000.00 at an exchange rate of US$1 to GHe11.5299 to the Chief Director, Ministry of Finance to enable the Ministry make part settlement of the arbitral award to GPGC Limited in relation of the above-mentioned case,” it read.
Judgment Debt
The Power Purchase Agreement was signed during the Mahama administration in June 2015 to provide 107MW of power and to be completed by mid-2018 but before 2018, the contract was terminated by the Akufo-Addo administration.
GPGC sought arbitration through the United Nations Commission on International Trade Law (UNCITRAL) tribunal in the United Kingdom (UK) and subsequently obtained a ruling in its favour in 2021 with a judgment debt of US $164 million against Ghana.
Deferment in honouring the judgment debt put Ghana’s High Commission building in the United Kingdom, the commissioner’s residence, the Ghana International Bank building, and other properties at risk.
Meanwhile, Kwabena Donkor under whose tenure as Energy Minister the Agreement with GPGC was signed was cited as saying the termination “made no sense commercially and legally”.
However, Boakye Agyarko under whose tenure as Energy Minister it was terminated explained the decision was based on18-member committee report which found the agreement would cost the country an estimated loss of USD 18 million or payment of an excess capacity charge of USD 24.90 million per annum over the contract period of 4 years.
