Oil conglomerate Trafigura has taken control of Regina House, a property owned by government of Ghana in London since Independence. This event follows Ghana’s inability to pay a $134 million judgment debt owed to the company after a UK tribunal ruled that the government breached a power purchase agreement with Trafigura’s subsidiary, the Ghana Power Generation Company (GPGC), back in 2018. Despite partial payments, a weighty balance remains, prompting Trafigura to seize the property.
The power deal in question was terminated by the government of Ghana, which claimed GPGC failed to meet contractual conditions. However, the tribunal disagreed, awarding GPGC damages calculated under an Early Termination Payment formula. Following this ruling, Ghana only managed to pay $1.89 million of the total debt, leaving the bulk unpaid, which led Trafigura to take legal action in the United States and eventually seize Regina House.
This seizure puts Ghana in an embarrassing and difficult diplomatic position. Regina House serves as a crucial asset for the High Commission in London, contributing to its revenue stream and operations. With Trafigura in control of the property’s income until the debt is settled, Ghana’s diplomatic functions in the UK could face great disruptions. The Ghanaian High Commissioner, Papa Owusu-Ankomah, has acknowledged the strain, emphasizing that the situation will persist until the debt is fully paid or a suitable payment arrangement is reached.
The situation high points the ongoing economic tussels the country faces, especially in managing its international obligations. The inability to settle the judgment debt has raised broader concerns about the government’s financial management and the possibility for more assets to be targeted by creditors if similar disputes arise.
Negotiations are ongoing between the government of Ghana and Trafigura in a bid to sort out the issue. The Attorney General has indicated that efforts are being made to regain control of the property, but until an agreement is reached, the impact on Ghana’s diplomatic operations in London will be deeply felt.
