Parliament questions GWCL’s US$25.3m loan

Business News of Tuesday, 5 December 2017

Source: Graphic.com.gh

2017-12-05

Parliament of Ghana

Parliaments Joint Committee on Finance and Works and Housing has raised concerns over the ability of the Ghana Water Company Limited to service the US$ 25.34 million loan which the government intends to on-lend to it to finance the Navrongo Water supply Project.

This is due to the operational and financial challenges that have confronted the GWCL over the last couple of years.

Government intends to secure a loan amount of US$ 25.34 million from the ING Bank of Belgium, which it plans to on-lend to the GWCL as a loan component to finance the US$ 37.68 million Navrongo Water Supply Project.

But the Committee is not convinced about the capacity the national water company to repay the debt.

As a result, it has directed the Ministry of Sanitation and Water Resources (MSWR) to ensure that the GWCL runs efficiently to be able to service the loan.

Deputy Minister of Finance, Ms Abena OSei Asare, when she appeared before the committee said the Ministry would engage the MSWR to do the relevant assessment before the on-lending.

She assured the committee that the final agreement would come back to Parliament for approval.

She said the government’s decision to on-lend loan facilities to agencies was to ensure that these agencies run efficiently to be able to borrow on their own balance sheets.

Read also: BoG cracks whip on high NPLs – Demands answers from banks

Terms and conditions

The loan facility comes with an interest rate of 1.95 per cent per annum, plus six months Eurobor, and a commitment fee of 0.80 per cent per annum on the projected facility for the availability period.

It also comes with a management fee of 0.85 per cent which would be paid up front, a three year grace period and a repayment period of ten years.

Project objectives

To address the water supply challenges of Bolgatanga, Navrongo Bongo, Paga and its surrounding communities, there was the need to commence the water project which seeks to provide a new raw water source and a new treatment plant.

The main objective of the project is to produce and supply portable water to adequately cater for these communities up to the year 2030.

It is expected to culminate in the provision of essential basic water supply infrastructure and also improve the health of the inhabitants in the area.

It will also serve as an economic stimulus for existing companies and industries and new companies as well as improve the standard of living of women and children in the region.

This will also lead to a reduction in the prevalence of common water-borne diseases as well as reduce the stress of having to trek long distances in search of water.

The project is also expected to reduce the pressure on health facilities in the region as a result of a reduction in water-related diseases.

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