Update (18 Jul 2016): Volta River Authority Engulfed In Debt. Does This Pose A Risk To The Financial Sector?

EVENT

Ghana's state-owned power generation company, the Volta River Authority (VRA), is indebted to 13 local banks and foreign financial institutions¹ to the tune of about US$ 1.1billion as at July, 2016. This is hampering operations of the company contributing to power rationing in the country popularly known as "dumsor".

MAIN FINDINGS

Indebted to Banks

Of the 29 universal banks in Ghana, the VRA owes 13 of them, with Ecobank (Ghana's biggest bank) being the largest creditor, being owed US$ 103 million, followed by Unibank (US$85 million), Standard Chartered (US$81million) and Zenith bank (US$30milllion). The loans were primarily used to purchase light crude oil and gas to fuel thermal power plants in the wake of a shortage of gas sources from Nigeria, through the West Africa Gas Pipeline (WAGP).