The Ministry of Finance is expected to write off about US$120 million of the Tema Oil Refinery’s (TOR) legacy debt as part of efforts to ease the financial burden on the state-owned refinery.
TOR Managing Director Edmond Kombat disclosed this when Parliament’s Energy Committee visited the refinery as part of a working engagement.
He said TOR’s legacy debt currently stands at about US$400 million, following an earlier restructuring exercise.
Mr Kombat explained that the restructuring had initially reduced the refinery’s outstanding obligations to about US$400 million, with further relief expected if the proposed write-off is implemented.
“We do have legacy debts on our books. When we did the restructuring, the first phase brought it down to about $400-and-something million,” he said.
According to him, the Ministry of Finance plans to include the proposed write-off in the 2026 Budget.
“Currently, the Ministry of Finance is saying they are going to write off some of the debts owed to them. I think they are including it in this year’s budget. It’s about $120 million. So if that is taken out, it will also further bring the debt down,” he explained.
TOR still owes private, state institutions
Despite the anticipated relief, Mr Kombat said TOR continues to face substantial financial obligations to both private companies and state-owned institutions.
He mentioned Sahara and BP among the refinery’s private creditors, indicating that management is engaging them to negotiate possible discounts on the outstanding amounts.
“We also owe GNPC and VRA. Because they are state institutions, we will need your help as the Parliamentary Select Committee to help net it off,” he told the committee.
Mr Kombat therefore appealed to the Energy Committee to assist management in resolving the debts owed to the Ghana National Petroleum Corporation (GNPC) and the Volta River Authority (VRA).
He said while management continues negotiations with private creditors, support from Parliament would be critical in addressing the obligations owed to the two state institutions.
The proposed debt write-off, he said, would provide further relief to TOR and help improve the refinery’s financial position as it works to address its longstanding liabilities.
