Barely a month to the general elections, Parliament is busily approving loans much to the chagrin of the minority New patriotic Party, who are gunning to form the next government.
The House on Tuesday approved a sixty million dollar (US$ 60.000.000) loan for the Ghana Energy Development and Access Project. The loan agreement is between Government of the Republic of Ghana and the International Development Association (IDA).
The report of the Finance Committee in Parliament indicates that in 2007, the Government of Ghana initiated the Ghana Energy Development and Access Project (GEDAP) at a total cost of USD 296.83million. The purpose of the GEDAP is to improve the operational efficiency of the electricity distribution system, increase the access to electricity, and to help transition Ghana to a low carbon economy through the reduction of greenhouse gas emissions.
According to the committee report, the original project had three components: Sector and Institutional Development; Electricity Distribution Improvement; and Electricity Access and Renewable Energy.
However, with the additional contribution from AfDB, a forth component (component D) for transmission upgrade was added.
TERMS AND CONDITIONS OF THE FACILITY
The additional credit is a concessional facility with standard IDA terms as follows:
Commitment Charge : 0.5% per annum on the unwithdrawn balance
In line with the Government ‘s debt management strategy , the Ministry of Finance intends to on-lend the entire facility to ECG under the following terms:
Commitment Charge : 0.5% per annum on the unwithdrawn balance
The committee noted that in addition, the Electricity Company of Ghana (ECG) shall bear all the exchange rate risk associated with the loan.
Nevertheless, the Ranking Member of the finance committee, Akoto Osei argued seriously that the terms and conditions attached to the on-lend to the ECG is not conducive.
He demanded that and that the government assured the House that it will take a second look at the deal and reconsider its position.
He stressed that ECG does not have money to pay the loan within 17 years when it could agree on the 25-year concession loan agreement.
This is coming a day after the House on Monday approved four loans for different projects including:
* A 65,037,500 euro facility agreement between the government of Ghana and Banco San dander S.A and its affiliates for the development of the Kumasi International Airport.
* The house also approved another loan of 11,239 billion Japanese yen for the construction of a new bridge across the Volta River on the Eastern Corridor Road at Volivo.
* Another USD 83,400,000 loan agreement between the government of Ghana and African Development Fund was approved. This loan Facility is for the Accra Urban Transport Project.
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