In June 2018, Tollow Oil entered into an Engineering, Procurement, Construction and Commissioning (EPCC) Agreement for the construction of a 10km pipeline from Maame Water Terminal to the Karpowership at Sekondi and other facilities. The project was estimated to cost US$ 26.5 million. As per the initial arrangements, approval was granted for Amandi Energy to pre-finance the project and pass on total costs including financing costs to Tollow Oil.

Amandi sort funding from Standard Charterd Bank Limited. Under the terms of the Funding Agreement between Amandi and Tollow Oil, Tollow Oil is expected to refinance the loan within 18 months of commencement of the project.

The following are the terms of the loan:

Loan Amount: US$ 26,500,000.00

Interest Rate: 11%

Fees & Charges

Arrangement Fees: 1%

Processing Fees: 1%

Per the Facility Agreement between Tollow Oil and Amandi, during the 18 months, Tollow Oil must pay all the applicable interest, charges, fees and commissions which the bank will charge. The 18 month period also serves as a moratorium on the principal.

To date, a total of US$ 2.4million has been paid under this arrangement as interest and fees. The breakdown is as follows;

Item	Description	Amount US$
1	Interest on Loan	1,720,019.41
2	Fees and Charges	701,745.25
	Total	2,421,764.66

It is expected that Tollow Oil will refinance the loan by March 2020, which is the same time for the moratorium to end. Should this happen, the Company will be expected to make an average monthly payment of about US$900,000 being accrued interest and principal. The agreed repayment source is from the proceeds from the transportation of Lean Gas to the Karpowership

To ensure the Company meets its loan obligations, all commercial arrangements between Tollow Oil and Ghana National Petroleum Authority on the Karpowership must be firmed up to ensure that all receivables due Tollow Oil are appropriately documented and collected. Failure to do so may lead to the likelihood of the Company defaulting in the repayment of the loan.

Additionally, Tollow Oil can explore the option of suggesting that Ghana National Petroleum Authority allows Karpowership to pay Tollow Oil directly for the transportation services offered or to ring-fence this Karpowership Transaction from other GNPC transactions so that GNPC can pay for the Karpower transportation tariff separately because of the loan.

(A). Advise the Ministry of Finance, the Tollw Oil and the Ghana National Petroleum Corporation on the most appropriate measures to be undertaken in resolving this financial hurdle and interplay of responsibilities. The report must include relevant references, data and figures that support all arguments.

(B) Advise the Ministry of Finance, the Tollow Oil and the Ghana National Petroleum Corporation in a 3000-word Comprehensive Report on Methods of Financing and Management of Risk for Midstream and Downstream Petroleum Business Operations in Ghana