News:
July 18, 2014
Government has indicated that it would pursue only $1.5 billion out of $3 billion China Development Bank (CDB) loan facility which Ghana has been chasing for nearly four years.
The loan facility is aimed at financing projects such as the Takoradi-Kumasi Western Corridor Infrastructure project, the Sekondi Free Zone project, the ICT enhanced surveillance project for the western corridor oil and gas enclave project, among others.
However as at June 2014, three years after the Master Facility Agreement (MFA) and other finance documents under the facility were signed, only two out of the twelve projects anticipated under the facility have been financed by CDB. These are the Western Corridor Gas Infrastructure Project (WCGIP) (US$800 million) and the ICT enhanced Surveillance Project for the Western Corridor Oil and Gas enclave (US$150 million).
Finance Minister, Seth Terkper, said this during his mid-year review of the 2014 budget to Parliament on Wednesday requesting for an amount of over Ghc 3 million supplementary budget.
He explained that CDB has introduced a new condition precedent to the effectiveness of the subsidiary agreement for the two additional projects, namely a side agreement to amend some of the terms of the MFA, the Five Party Agreement and the Account Agreement.
Mr Terkper noted that the Side Agreement is to primarily ensure that starting from the 10th shipment of crude oil to Unipec Asia, in support of the facility, GoG will transfer an amount equal to 49 percent of the price of the shipment into the debt service account to ensure that GoG has sufficient funds to service the debts when principal repayments become effective in 2015; and the CDB facility is recognised as an oil-backed transaction contrary to the agreed position between CDB and GoG during the initiation of the transaction that the facility is not an oil-backed facility.
He said in view of these new conditions Cabinet will soon present to the Legislature, a request to reduce the $3 billion China Development Bank (CDB) loan to half.
Meanwhile government has indicated that it will not cancel any of the projects which were supposed to be financed by the $3 billion China Development Bank (CDB) loan.
Kwadwo Anim/Ghanamps.gov.gh