The Institute for Energy Security (IES) has bemoaned the impact of a judgement debt that has been slapped on the government by the International Court of Arbitration.
Ghana has been hit with a US$134 million judgement debt over the cancellation of its Emergency Power Agreement with GCGP Limited.
The contract, signed in 2015, was among those cancelled by former Energy Minister, Boakye Agyarko with the reason that they were not needed and were only going to further lead to the ballooning of Ghana’s debts in the energy sector.
The International Court of Arbitration in its ruling on the contract cancellation also said the judgement debt comes with a US$30 million interest payment obligation.
The IES, on their part, believes this is unfortunate. In an interaction with Citi Business News, a fellow at the IES, Beatrice Annan, noted that this judgement debt has not only caused financial strain on the country but has gone a long way to damage the country’s reputation.
She stated, “It means that the country will have to use taxpayers’ money in excess of $134 million to pay the foreign entity, which is GPGC. It further means that as a struggling economy as we are, government will have to cough up another $30 million to pay interest.”
“Beyond the financial damage that has been caused to the country, it also damages our reputation. So the international community will begin to look at Ghana with another eye and for us, we think that it is not a good brand to build as a nation,” she bemoaned.
Details of the debt
The ruling by the International Court of Arbitration ordered the government to Ghana to pay to “GPGC the full value of the Early Termination Payment, together with Mobilization, Demobilization and preservation and maintenance costs in the amount of US$134,348,661, together also with interest thereon from 12 November 2018 until the date of payment, accruing daily and compounded monthly, at the rate of LIBOR for six-month US dollar deposits plus six percent.”
The government of Ghana was also to pay GPGC an amount of “US$309,877.74 in respect of the Costs of the Arbitration, together with US$3,000,000 in respect of GPGC’s legal representation and the fees and expenses of its expert witness, together with interest on the aggregate amount of US$3,309,877.74 at the rate of LIBOR for three-month US dollar deposits, compounded quarterly”.