The Ministry of Finance is expected to write off approximately US$120 million of the legacy debt owed by the Tema Oil Refinery (TOR) as part of efforts to improve the financial position of Ghana’s state-owned refinery.
TOR Managing Director Edmond Kombat disclosed the development during a working visit to the refinery by Parliament’s Energy Committee.
According to Mr Kombat, Tema Oil Refinery’s outstanding legacy obligations currently stand at approximately US$400 million, following an earlier debt restructuring exercise.
TOR Legacy Debt Stands at About US$400 Million
Mr Kombat explained that the refinery’s legacy liabilities were reduced to slightly above US$400 million after the first phase of its debt restructuring.
He said the Ministry of Finance is now considering a further debt relief measure involving approximately US$120 million.
The proposed write-off is expected to be included in the 2026 national budget, which would reduce the outstanding debt burden of Tema Oil Refinery if implemented.
The TOR Managing Director said removing the US$120 million obligation from the refinery’s books would provide additional relief and help improve its financial position.
Tema Oil Refinery Still Owes Private and State Creditors
Despite the proposed debt write-off, TOR continues to face significant financial obligations to both private companies and government institutions.
Mr Kombat identified Sahara and BP among the refinery’s private creditors and said management is engaging them to negotiate possible reductions or discounts on the outstanding amounts.
He also disclosed that Tema Oil Refinery owes the Ghana National Petroleum Corporation (GNPC) and the Volta River Authority (VRA).
Because GNPC and VRA are state-owned institutions, Mr Kombat appealed to Parliament’s Energy Committee to assist with discussions on how the obligations could potentially be netted off.
Parliament Asked to Support TOR Debt Restructuring
The TOR Managing Director urged the Parliamentary Select Committee on Energy to support efforts to address the refinery’s debts to GNPC and VRA.
Meanwhile, management will continue negotiations with private creditors as part of a broader strategy to reduce TOR’s legacy debt and strengthen the financial sustainability of the refinery.
The proposed US$120 million debt write-off is expected to form part of wider government efforts to address the financial challenges facing Tema Oil Refinery and support the future of Ghana’s domestic petroleum refining sector.
Source: newsthemegh.com