The Government of Ghana has signed a Memorandum of Understanding (MOU) with Sinohydro Corporation Limited for the execution of a number of key projects across the country.
Among others, the Chinese state-owned company will undertake a Multipurpose Hydro Project at Pwalugu; a Volta Lake Transportation Project; an Accra Flood Prevention Project, as well as other priority infrastructure projects including garbage treatment plants, solar power plants, and rail projects, at an estimated cost of $4 billion.
This brings to $19bn, the commitments made by the Chinese government and its agencies following the acceptance of the financing model proposed by Vice President Dr Mahamudu Bawumia, which involves the leveraging of a fraction of Ghana’s bauxite deposits, during his recent State visit to the People’s Republic of China.
The MoU was signed on behalf of the Government of Ghana by the Senior Minister, Mr Yaw Osafo-Maafo, while Mr Chen Zhenrong, Representative of Sinohydro in Ghana, initialled for his company in Accra on Wednesday July 13, 2017.
“Sinohydro has made representations to Ghana that the financing model proposed by Ghana is acceptable to her and that it has the technical capability, the competencies, the experience, the financial capacity and other resources to finance and execute the Projects proposed in this MoU and to be determined totaling up to US$4 Billion”, part of the MoU read.
According to the terms of the MoU, the proposed Projects shall be executed in accordance with specifications and standards approved by the Government of Ghana, while Sinohydro will act as the principal project development partner and work through local companies with significant Ghanaian participation.
It would be recalled that the Vice President, Dr Mahamudu Bawumia, after a four day official visit to the People’s Republic of China, announced the signing of a number of MoUs with Chinese state actors to provide financing for a number of infrastructure projects in Ghana, to be financed by the exploitation of some of Ghana’s minerals, in particular bauxite.
Briefing the media after the 4 day State visit, Dr Bawumia indicated: “Our trip was purposeful. We came back with some leading Chinese companies and agencies of the Chinese government signaling their interest in our agenda and with agreements totaling $15 billion, with the possibility of a further $4bn in the near future.”
Giving a breakdown of the agreements, H.E. Dr Bawumia stated: “The China National Building Materials and Equipment Import and Export Corporation (CNBM) signed a $2 billion facility with the private sector – led by the Association of Ghana Industries (AGI) – to provide funding for the ‘One District One Factory’ programme;
“China Development Bank (CDB) agreed to unfreeze $2bn loan and signaled their willingness to re-negotiate it into a concessionary facility with a grant element, an extended maturity and at a much lower interest rate.
“The China Exim bank is committed to providing about $1 billion to Exim Bank Ghana to support infrastructure and business development;
“China Railway International Group Limited signed a Memorandum of Understanding to provide $10 billion to support the components of a massive infrastructure development programme spanning the mining, industrial and railway fields.
“We are undertaking all of these projects, not by borrowing but with less than 5% of our refined bauxite reserves.”