President John Mahama on Tuesday taunted the country’s power producer Volta River Authority (VRA) for contracting several loans from most banks in the country.

Owing to this situation, the banks do not want to give letters of credit to VRA to buy crude oil.

The President, who was speaking to journalists in Accra, defended his administration’s recent resolution to increase prices of petroleum products by 27 percent to help the VRA settle its debts which is in excess of $1.3 billion.

“VRA today cannot go to any bank and establish an LC (Letter of credit) because I think they owe virtually every bank in Ghana. As the line got chocked here, they went and opened a new account in another bank and then they will take the credit till it gets chocked, then they open a new account in another bank. So now any bank they go to says ‘hey yenim mo,” he said.

Mr. Mahama further indicated that “…Now if we want a sustainable power sector we need to deal with that debt; I don’t have that money, If I had, I will pay on behalf of VRA. And so we need to take that money from somewhere”.

In September last year, VRA’s Business Development Manager, Kofi Ellis said it was raising funds through the banking sector to help settle its debt of about $182 million to Nigerian gas suppliers N-Gas and the West African Gas Pipeline Company (WAPCo).

Mr Ellis added that VRA was equally indebted to the Ghana Gas Company to the tune of over $130 million.

VRA needs at least $30 million a month to buy Light Crude Oil (LCO) to fuel thermal power plants in Tema and Takoradi to generate some 520 megawatts of power.

In the Aboadze power enclave, VRA will require $15 million every month to buy LCO for the Takoradi Thermal Power Plant Company (TAPCO) to generate 300MW from a combined cycle and another $15 million every month to buy LCO for Tema Thermal Power Plant (TT1), with a capacity of 110MW and the 110MW-Cenit Power Plant to generate 200MW per day in the Tema power enclave.

VRA’s indebtedness as a result of monies spent on fuel is almost $2 billion.

A breakdown of VRA’s indebtedness to banks is $1.3 billion, Ghana National Gas Company – about $200 million and N-Gas of Nigeria – almost $200 million.