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Government justifies GNPC’s $700m loan to augment its operations

  • SOURCE: | Editor
  • mah

    The Minister of Finance, Mr. Seth Terpker, has justified GNPC’s move to acquire a loan facility to augment its operations.

    GNPC has  reportedly  secured a $700 million loan from the Deutsche Bank and used its share of oil revenue as collateral.

    The state-owned company has explained that it needs the money to make more investments in Ghana’s oil and gas infrastructure and cannot be living hand-to-mouth on government funds.

    Many Ghanaian’s including civil society groups have questioned GNPC’s ability to effectively manage the loan of that size and for the right purpose.

    But delivering the 2015 Budget and Economic Statement in parliament, the Minister of Finance Mr. Seth Terpker stated that the loan is not a government of Ghana loan but explained GNPC needed it to improve gas infrastructure.

    ‘’The cost of borrowing at around 5 percent is highly competitive. The uses, as outlined by GNPC, are very clear and compelling, both commercially and strategically.

    “The facility, together with GNPC’s other resources, will be used to support such investment needs as the pipeline and receiving facility in the Offshore Cape Three Points Project (OCTP), which GNPC will finance with US$493 million out of the loan proceeds, to provide a significant boost to monetizing Ghana’s natural gas’’.

    Meanwhile he added, that government will appoint a transaction advisor for the purpose of the loan which will also advise on a further consolidation involving TOR and BOST.

    Source:Daily Graphic

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