VRA gets $150 million to restructure balance sheet

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The Volta River Authority (VRA) has signed an agreement with Africa Export-Import Bank (Afreximbank) for the release of a $150 million loan facility to the authority.

The amount, which is the first tranche of $450 million, is expected to help the VRA to convert its short-term loans on its balance sheet to medium term, thereby giving the authority more space to embark on projects to enhance its efficiency in power generation in the country.

The remaining $300 million is expected to hit the accounts of the country’s premier power generator by the first month of next year.

The Chief Executive Officer of VRA, Mr Kirk Koffi, who initialled the agreement with Afreximbank at a ceremony in Accra, said the facility was timely as it was expected to clean the books of VRA.

He said the facility would free up capital and strengthen the Authority’s balance sheet and help manage its operations in a much better way.

Mr Koffi said with the facility the “VRA can do its bidding better by turning its short-term liabilities into medium term and it will help us in generating more electricity for the country.”

He expressed the hope that it would also help build more capacity as required so as to meet and even exceed the country’s demand.

Mr Koffi said VRA was faced with capacity shortage not because it had not got adequate capacity but it was because the inflow into the Volta Lake over the past two years had been bad and could not have been able to power the needed hydro generation hence the load shedding situation.

“We need to add on more thermal generations and it takes more money to fund thermal generations,” he said, adding that “because of the current bad status of our balance sheet, it’s good that we do this.”

The Executive Vice President of Afreximbank, Dr Okey Oramah, who signed the facility on behalf of the bank, said Africa’s demand for more energy was a testimony to the growing middle class.

As a result, he noted that power generation companies such as the VRA needed more long-term capital to expand and increase generation capacity to meet the demand in the country.

A Director of C-ENERGY Ghana, Mr Michael N.A. Cobblah, for his part, explained emphatically that the facility was not intended to swell the loan book of VRA.

He said: “This is just to replace the short-term loans with medium-term loans and that gives the VRA the opportunity to restructure its balance sheet and also to improve its power generation capacity.

source : Graphic Online