The Ghana National Gas Company Limited (GNGLC) is currently grappling with a significant debt crisis, primarily due to the Volta River Authority’s (VRA) inability to meet its payment obligations.
As of June 30, 2024, GNGLC’s debt to the Ghana National Petroleum Corporation (GNPC) has escalated to over $626 million, up from approximately $559 million in the same period the previous year. This 12.1% increase in debt is largely attributed to VRA’s ongoing financial challenges, which have hindered its capacity to pay for the gas supplied by GNGLC.
The Public Interest Accountability Committee (PIAC) has highlighted the severe implications of this escalating debt on the operational viability of both GNGLC and VRA. The report also raises concerns about potential violations of the Petroleum Holding Funds (PHF) statutory framework, as proceeds from natural gas sales are a crucial source of revenue for the fund.
This is not the first instance of such financial strain. In 2019, reports indicated that VRA owed Ghana Gas approximately $735 million, a situation that significantly impacted the company’s operations. Despite these challenges, Ghana Gas continued to supply gas to VRA to prevent potential power crises in the country.
The recurring nature of this debt issue underscores the need for a sustainable solution to ensure the financial health of Ghana’s energy sector.
