3 July 2012

Ghana: U.S.$3 Billion Chinese Loan Ready - Disbursement in Connection With Western Gas Project First in Line

After almost three years of critical examinations of both the Master Facility and the subsidiary agreements by Parliament and civil society organisations, the much publicised $3 billion Chinese loan is now ready for disbursement, according to the Finance Minister Dr. Kwabena Duffour.

Though the loan agreement between the Government of Ghana and China Development Bank (CDB) was approved by Parliament last year, after days of deliberations, the disbursement had still not been made, thus fueling speculations that another foreign loan debacle was in the pipeline.

During ex-President Kufuor's regime, an attempt was made to secure a $1 billion loan from the International Finance Corporation (IFC), in what became known as the 'CNTCI loan' for infrastructural development.

Despite fears by the then Minority side in Parliament, which doubted the credibility of the facility, the Legislative House went ahead to approve of the loan, which was never released by the creditor.

When President John Evans Mills assumed office in January 2009, he also went to Korea looking for $1.5 billion from the Exim Bank of Korea for the construction firm, STX, to put up houses for the security agencies.

Though the current Minority side in Parliament also raised concerns about the genuineness of the loan, their Majority counterparts used their numbers to approve of the loan. Two years after the loan had been approved, the Koreans failed to disburse the facility, forcing the government to recently abrogate the contract with STX, after raising the hopes of the security agencies that it was going to promote decent accommodation for them.

The government has now turned its attention to a South African company for succor.

But, Dr. Duffour, who was speaking in an interview with The Chronicle in Accra on Sunday, allayed the fear that another loan fiasco was staring the government in the face.

According to him, the disbursement of the loan had delayed because it took Parliament quite some time to pass all the nine subsidiary agreements that accompanied the master facility. According to him, since the construction of gas infrastructure in the Western Region was dear to the hearts of the people of Ghana, the facility would be the first beneficiary of the loan disbursement.

The Finance Minister, who is also a former Governor of the Bank of Ghana, said a delegation from China would arrive in the country any moment from now, as part of the process for the release of the funds.

In April this year, the Vice President, John Dramani Mahama, led a government delegation to China, where they signed two subsidiary agreements with the China Development Bank (CDB), for the release of $1 billion out of the $3 billion CDB loan facility.

Out of the $1 billion, $850 million was to be spent on the gas infrastructure development project in the Western Region, with the remaining $150 million going into an Information and Communications Technology (ICT) platform for surveillance of the oil and gas field.

According to the government, the gas infrastructure development project, which is being developed by Sinopec International Petroleum Service Corporation of China, involves the construction of a 45 kilometres offshore pipeline from the Jubilee Field to transport gas, the construction of a gas processing plant, a gas dehydration unit, and an liquefied petroleum gas

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