Government is expected to make another round of payment of some GH¢110 million to banks that players in the energy sector are indebted.

The Finance Ministry last month began the process of clearing the about 2.5 billion cedis energy sector debts, with some 250 cedis  payment of VRA ‘s debts.

However, with latest figures from Bank of Ghana (BoG) suggesting that Banks still fear large chunk of their loans will not be paid on time, raised questions about government commitment to paying the debts.

But speaking to JOY BUSINESS after the Annual General Meeting of Ghana Association of Banks, President Alhassan Andani says government is even expected to make another payment in December.

He also explained government will indeed improve the financial position of banks, a development that could improve credit delivery positively and even reduce the cost  of borrowing

The debt restructuring of the Cedi and US Dollar denominated VRA Legacy Debts will be repaid from an account opened for the proceeds accruing under the Power Generation & Infrastructure Support sub-account, under the Energy Sector Levies Act (ESLA, 2015). 

An estimated 50% of the proceeds would be used to retire the VRA Legacy Debts. 

The other 50% of proceeds under the ESLA plus the current enhanced internally generated funds of VRA will all be escrowed into a centrally-managed account to be used to service trade and other creditors of the power sector.

 

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