Trafigura Chases Ghana Over $111 m

Trafigura’s subsidiary, Ghana Power Generation Company (GPGC),  has written to the Government of Ghana to demand the immediate payment of an amount of $111 million the country owes the company.

In a letter addressed to Ghana’s Finance Minister, Dr. Mohammed Amin Adam and copied to Attorney General Godfred Yeboah Dame, GPGC informed them that it has officially begun the legal process to enforce an arbitral award it had in South Africa.

This follows their letter dated September 20, 2024, which, according to the company,  has not yet received a response from the Government of Ghana.

As part of its enforcement efforts, GPGC added to the letter, further  documentation of the legal filings and  noted that serving the Ghanaian Government through diplomatic channels may take some time.

Meanwhile,  GPGC has already subpoenaed 16 US-based banks for information related to the case and plans to issue further subpoenas to US companies connected to the Government of Ghana.

This indicates that more legal actions will follow if the situation remains unresolved.

The judgment stems from Ghana’s decision to terminate a power purchase agreement with GPGC.

This legal dispute began on January 26, 2021, when a UK tribunal issued a final ruling stating that the Government of Ghana breached its contractual obligations under the agreement.

The breach occurred on February 18, 2018, when Ghana unilaterally canceled the contract, resulting in the tribunal finding Ghana liable for $134,348,661 in early termination payments to GPGC.

In August 2024, Trafigura briefly seized Ghana’s Regina House in the United Kingdom as part of its effort to enforce the payment agreement. In response, the government paid $23 million of the debt, leaving an outstanding balance of $111 million.

In its recent letter, GPGC set a deadline for the government to settle the debt by the end of the week.

The company expressed a preference for resolving the issue amicably rather than pursuing further legal action. GPGC stated: “We would nevertheless like to reiterate the message of our previous correspondence, that we would prefer not to take any further enforcement action and instead to resolve the matter amicably by fully executing the settlement agreement, as soon as possible, ideally within this week, and receiving payment in accordance with the agreed schedule.”

In response to the circulation of GPGC’s letter on social media,the Government of Ghana has reiterated its commitment to fulfilling its obligations under the Settlement Agreement with Trafigura to resolve the matter swiftly

The Ministry of Finance clarified that the letter reflects ongoing discussions to settle the claims and assured that necessary arrangements have been made to honor the outstanding payments following several rounds of negotiations with Trafigura.

“The Ministry of Finance wishes to state that we have made the necessary arrangements to pay off the outstanding claims agreed with Trafigura after several rounds of negotiations.

“We are therefore surprised at the circulation of this letter on social media. The Government of Ghana remains committed to honoring its obligations under the Settlement Agreement with Trafigura to bring this matter to closure”, Finance Minister Dr. Adams explained.