Ghana’s state-run oil firm GNPC is set to sign a loan agreement with private commercial lenders led by commodity trader Trafigura. In an interview with Reuters the company’s chief executive, Alex Mould, said the $700 million loan would help fund its expansion.
Negotiations for the Trafigura-led loan began last year and is expected to close soon. “We got responses from 18 of the leading global lenders – both banks and commodity traders and we are working with the prospective lenders to close the deal soon,” Mould said in the Reuters report.
The loan is seeing some criticism, not for the first time either. In November certain officials in the Ghanaian government, as well as world lending institutions and consultancy firms have expressed concern over the amount of debt GNPC is acquiring and the word “needless” has been thrown around to describe loans GNPC has been seeking.
The loans are said to be necessary for GNPC to accelerate its growth and become a standalone operator in the oil and gas arena. In April 2014 Mould said $1 billion was a “good place to start” when it came to funds needed to meet its growth expansions plans. The company has joined in on a number of exploration assets through its GNPC Exploration and Production Co. Ltd. It will also be taking its place onshore and plans more than a few wells there to determine if the country’s offshore bounty extends onshore.