The Ministry of Energy has disclosed that the proposed US$ 620 million Ghana National Petroleum Corporation loan from Lukoil International Trading and Supply Company (LITASCO) SA will be laid before parliament for approval next month.
According to the ministry, the GNPC is seeking the funds and has so far obtained board approval, upon which the sector ministry and the Ministry of Finance issued a ‘no objection’ and gave their go-ahead – in line with directives of the Public Financial Management Act (PFMA).
“From the foregoing, it is clear that GNPC needed to meticulously finalise the facility’s terms and conditions and obtain necessary procedural approvals ahead of the final parliamentary approval,” it stated.
The ministry’s statement was in response to concerns raised by the minority lawmakers, that government is pushing the deal through without proper approval.
It will be recalled that GNPC, in its 2023 work-plan submitted to parliament, included arrangements being made to refinance the LITASCO SA loan facility incorporating bank guarantees in favour of the Karpower Barge. In the plan submitted to parliament, GNPC, among others, indicated its intentions to arrange a ‘pre-export financing facility’ of up to US$500million and a bank guarantee of US$120million.
However, the Ranking Member of the Mines and Energy Committee, John Jinapor, raised concerns that government is exerting undue pressure on GNPC to secure the facility. “The Presidency is using coercive force to compel the GNPC to proceed and execute this loan agreement without parliamentary approval. This is unconstitutional, this is unlawful – and this is a blatant disregard to the directive and resolution of parliament”.
“If you (GNPC) proceed with this directive, you will be committing an illegality. You do not have the mandate and the power to enter into such an agreement without parliamentary approval. The minority wishes to serve notice that we shall use every necessary tool available to ensure that the right thing is done,” he said.
Also, he said, a document intercepted at the GNPC board level included a deed of indebtedness on the Jubilee Oil Holding Limited (JOHL) crude oil supply and purchase agreement, prepayment facility agreement and guarantees facility agreement.
“The key has to do with the fact that GNPC is raising this facility from LITASCO, and in return they are giving our oil out to this company for the next five-and-a-half years. Indeed, all the oil in the TEN Oil Field has been encumbered including royalties; and our carried and participating interests will be escrowed into this company,” he said.
At a press conference in Accra, the minority in parliament said there is a lack of clarity regarding utilisation of the loan, aside from debt repayment – arguing that there is no justification for taking a US$431million loan that will mortgage the resources for the next five-and-a-half years, which they warned could encumber the entire TEN field’s oil.
However, the energy ministry maintains that the work programme of GNPC is approved every year by parliament – which includes loans they may need to execute their programme. “It is important to state that this particular facility that the minority mischievously makes allusion to is being re-financed for the sixth time”.
It said parliament’s Mines and Energy Committee has since requested that the loan’s terms and conditions be brought to parliament in line with the legislature’s oversight functions.
“Government actors in this matter have no intention of hiding any part of the process in secrecy,” the energy ministry further assured.