Tema Oil Refinery (TOR) is calling for the release of GHS 1.6 billion in overdue funds from the Energy Sector Levy Act (ESLA). This settlement is crucial for TOR to address its substantial legacy debt and improve its financial standing for future operations.
The overdue payment stems from ESLA collections made on TOR's behalf. TOR's Managing Director, Edmond Kombat, confirmed the company is still owed this minimum amount by the Ministry of Finance. Ensuring these funds are released would significantly strengthen TOR's balance sheet, which has been impaired by both statutory obligations and trade liabilities.
This appeal aligns with a broader initiative by the Ministry of Energy and Green Transition. The Ministry is discussing with the Ministry of Finance to audit state energy agencies. This audit aims to identify and separate government-related debt that hinders these entities from securing commercial financing. Minister John Abdulai Jinapor stated that an impaired balance sheet makes it difficult for state energy entities to access funding.
The Minister made these remarks at the 18th annual general meeting of Tema Oil Refinery Limited. He explained that removing government-related liabilities from agencies' books will create cleaner balance sheets. This action will position TOR to attract financial markets and raise necessary capital. The cost of borrowing has fallen significantly, supported by Ghana's macroeconomic stability and disinflation.
TOR's Board Chairman, Nayon Bilijo, earlier disclosed that the company inherited a legacy debt of approximately US$517 million when the current Board started in July 2025. This debt includes US$97 million owed to the government and US$58 million to the Ghana National Petroleum Commission (GNPC). Other significant creditors include Volta River Authority (VRA) with US$78.9 million, Sahara Oil with US$128 million, and BP with US$41 million.
Mr. Bilijo highlighted that GHS 3.4 billion has been collected through ESLA on TOR's behalf. Of this amount, GHS 1.47 billion has already been used to reduce the company's debt. The current outstanding GHS 1.6 billion represents the remaining balance the company requires.
TOR's total debt stood at GHS 2.33 billion as of December 31, 2025. This figure represents a 13% decrease from the GHS 2.62 billion recorded in 2024. Long-term borrowings also saw a significant reduction, falling by 27% from GHS 957.2 million to GHS 695.5 million during the same period. Short-term borrowings amounted to GHS 1.632 billion.
The planned audit and settlement of ESLA funds will allow TOR to present a healthier financial profile. A stronger balance sheet is essential for the refinery to attract new investments and secure commercial financing. This move could also support the broader energy sector by freeing up trapped capital and improving operational efficiencies of state-owned enterprises.