Ghana Plans Debt Clean-up to Help TOR Secure New Funding

Ghana's government is moving to separate the Tema Oil Refinery's long-standing public debt from its balance sheet after the state-owned refinery returned to profit and resumed crude oil processing.

The plan is expected to improve the refinery's ability to secure financing for future operations, Energy and Green Transition Minister Dr. John Abdulai Jinapor said at TOR's 18th Annual General Meeting in Accra.

The proposal shifts attention from the refinery's financial recovery to the next challenge: securing enough funding to keep operations running. While TOR reported a profit before tax of GH¢1.42 billion in 2025, it still carries hundreds of millions of dollars in outstanding liabilities that could limit its access to credit.

Dr. Jinapor said he had discussed the matter with Finance Minister Dr. Cassiel Ato Forson. He explained that an audit of energy sector agencies would help determine government-related debts that could be ring-fenced and removed from TOR's balance sheet.

"What we want to do is examine the debt, particularly debt owed to the government, so that we can ring-fence it and remove it from the balance sheet. That will enable TOR to access the financial market to raise funds," he said.

Audit targets legacy debt

The planned audit forms part of the government's effort to deal with financial obligations that have built up over several years. Officials believe separating legacy debt from the refinery's current finances could make it easier for lenders and investors to assess TOR's present financial position.

At the end of December 2024, TOR owed US$97 million to the government. It also owed US$58 million to the Ghana National Petroleum Corporation, US$78.9 million to the Volta River Authority, US$128 million to Sahara Oil and US$41 million to BP.

These liabilities have weighed on the refinery even as it returned to crude oil processing after years of inactivity.

The government's approach suggests that restoring production alone may not be enough to secure the refinery's future. Access to finance is expected to play a major role if TOR is to maintain operations and meet future investment needs.

Dr. Jinapor said the government also plans to supply the refinery with crude oil produced within Ghana. The measure is intended to improve the refinery's access to feedstock and support continued operations.

Profit marks only one stage of recovery

The minister praised TOR's management and board for returning the refinery to operation in less than two years after it had stood idle for years.

He said the turnaround showed what strong leadership could achieve, describing the recovery as a significant accomplishment.

"In less than two years, you have demonstrated competence by turning around a refinery that had been idle for years," he said.

He thanked the management and board for what he described as an unprecedented achievement.

The reported profit before tax of GH¢1.42 billion gives the refinery a stronger financial position than in previous years. Even so, the size of its outstanding debts shows that financial restructuring is still needed if the recovery is to continue.

The government, through a combination of debt restructuring with plans to improve crude oil supply, is attempting to remove two major obstacles that have affected the refinery's performance.

Easier access to financing could allow TOR to obtain working capital and support future business activities without the burden of legacy obligations limiting its borrowing capacity.

Dr. Jinapor emphasised the government's commitment to supporting the refinery as it seeks to maintain production and strengthen its financial position.

The planned audit and debt review are expected to determine how much of the public debt can be separated from TOR's accounts. The step is believed to improve chances of attracting funding from the financial market.