The Government of Ghana has reaffirmed its dedication to meeting its obligations under the Settlement Agreement with Trafigura to resolve the issue promptly.
This statement follows the circulation of a letter on social media that suggested a delay in the government’s execution of the agreement.
On September 24, Trafigura’s Ghana Power Generation Company (GPGC) formally petitioned Finance Minister Dr. Mohammed Amin Adam for payment of outstanding arrears owed by the government.
In response, the Ministry of Finance clarified that discussions are ongoing to settle the claims and assured that necessary arrangements have been made to fulfill the outstanding payments after several rounds of negotiations with Trafigura.
“The Ministry of Finance wants to emphasize that we have arranged to pay the outstanding claims agreed upon with Trafigura after extensive negotiations. Therefore, we are surprised by the circulation of this letter on social media.
“The Government of Ghana remains committed to honoring its obligations under the Settlement Agreement with Trafigura to bring this matter to a close.”
In a letter addressed to the Finance Minister and copied to Attorney General and Minister of Justice Godfred Yeboah Dame, GPGC warned that it may be forced to seize Ghana’s assets in South Africa and the United States if the government fails to pay an outstanding $111 million from a total of $134 million in judgment debt awarded four years ago after Ghana terminated a power purchase agreement.
In August 2024, Trafigura briefly seized Ghana’s Regina House in the United Kingdom due to a default on a payment agreement.
The origins of this legal dispute date back to a January 26, 2021, ruling by a UK tribunal, which concluded that the Ghanaian government had breached its contractual obligations under the power purchase agreement with GPGC.
This breach occurred when Ghana unilaterally terminated the agreement on February 18, 2018. The tribunal ruled that Ghana owed GPGC a total of $134,348,661 as an early termination payment.
The government paid $23 million of this debt during the Regina House seizure, leaving a balance of $111 million. GPGC has given the government until the end of this week to settle the debt.
Read below the statement by the Ministry of Finance
Government of Ghana is on course to pay Trafigura
Accra, Tuesday 24th September 2024 –. It has come to our attention that a letter received today, 24th September 2024 our engagement with Trafigura is circulating in the media creating the impression of the government’s inaction on a yet-to-be-executed Settlement Agreement. As may have been noticed, the said letter references ongoing engagement on pathways towards settling the claims.
The Ministry of Finance wishes to state that we have made the necessary arrangements to pay off the outstanding claims agreed upon with Trafigura after several rounds of negotiations. We are therefore surprised at the circulation of this letter on social media.
The Government of Ghana remains committed to honouring its obligations under the Settlement Agreement with Trafigura with the view to bring this matter to closure.
