Seth Terkper – Finance Minister
The disbursement of the $3 billion China Development Bank (CDB) could start next month following amendment of the loan arrangement and its subsequent approval Wednesday by Parliament.
The facility would be disbursed over a three-five year period, CITY & BUSINESS GUIDE has gathered.
The Minority in Parliament called for the reconsideration of the arrangement following irregularities it sighted even though it had been approved by Parliament since August, 2011.
Government’s executive arm had to withdraw the loan arrangement following the Minority’s protest.
The country has since been able to withdraw just close to $200 million since it negotiated the arrangement with the CDB in 2011.
Ghana expected about $750 million to be released last year to fund the construction of a plant in the Western region to help process gas from the Jubilee field but that was not successful.
The Master Facility Agreement, the Five Party Agreement as well as Accounts Agreement revealed some ‘serious’ deficiencies in the agreements.
As part of the requirements, Ghana National Petroleum Corporation (GNPC) entered into an ‘Off-taker Agreement’ with UNIPEC Asia Company Limited for the sale and purchase of the Jubilee Oilfield with part of the proceeds to be paid into a special account at the Bank of Ghana for the purpose of servicing the debt.
As a result, a Five Party Agreement was entered into among the Ministry of Finance, Bank of Ghana, GNPC and UNIPEC Asia Company Limited but some provisions in the original agreements provided serious operational challenges to the Ministry of Finance while some provisions also conflicted with provisions in the Petroleum Revenue Management Act (Act 815).
Such serious challenges stalled the disbursement of funds required to finance critical projects like the Ghana Gas Project under the MFA and to re-activate the disbursements of the loan that those amendments were made.
The China Development Bank has so far disbursed $192 million in 2012 for the financing of the Western Corridor Gas Infrastructure Project while the government has also paid a commitment fee of $3, 012,909 on the undrawn balance, upfront fee of $7.5 million, interest of $596,753 and a contribution of $34 million.
Meanwhile, CEO of Ghana National Gas Company Limited, George Sipa-Yankey, has indicated that Ghana stands to incur huge costs to bring back European sub-contractor Michael Perry which laid the offshore pipeline at the Etuabo Plant in the Western Region.
The company halted its operations and left Ghana over the non-payment of some $30,000 owed them by the main contractor on site, Sinopec.
Government is indebted to Sinopec over $400 million, which is yet to be paid.
The issue, according to Dr Sipa-Yankey, could be resolved by the end of this week following Parliament’s approval of the China Development Bank loan agreement.
By Samuel Boadi