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Parliament approves three billion dollar loan agreement
 
Posted on: 18-Jun-2013         Source: GNA
 
 
 
Parliament on Tuesday approved a term loan agreement facility of three billion dollars between the Government of Ghana (GoG) and China Development Bank.

This is in line with the deed of security confirmation and amendments to the Master Facility Agreement (MFA).

This agreement was approved by Parliament on 26th August 2011 and was signed on the 16 December, 2011 with an Addendum to the MFA approved by the House on February 21, 2012.

However, due to certain challenges, the disbursement of funds was stalled and amendments proposed.

Mr James Klutse Avedzi, Chairman of the Finance Committee of Parliament, said the amendments were aimed at minimizing government‘s obligations with regards to money required to be transferred into the Collection Account with each lifting and to eliminate conflict between the agreement and the Petroleum Revenue Management Act.

He said the proposed amendment sought to establish a defined amount to be transferred by Bank of Ghana (BoG) into the Collection Account and the Bank of Ghana was required, under the original five-party agreement, to transfer 70 per cent of the commercial invoice value of each crude oil lifting by UNIPEC into the Collection Account.

The amendment also establishes a standby letter of credit in the same amount at BoG as surety for the transfer amount.

Mr Avedi said government, in fulfilment of its obligations under the MFA, had paid a commitment fee of 30,012,909.86 dollars on the undrawn balance, upfront fee of 7,500,000 dollars with interest of 596,753.28 dollars and government contribution of 34,005,000 dollars towards the implementation of the gas project.

Mr Avedi said it was recommended that the legal departments of those state institutions and the Attorney General’s Department be revamped and the capacity of the staff built with the requisite skills and competences required for negotiations in such international transactions and contracts.

The committee was of the view that the conditions of service for staff of the AG’s Department and the legal departments of the state institutions be enhanced to attract and retain qualified and experienced legal personnel, he said.

The committee observed that the amendment to the MFA imposed an obligation on the borrower to pay all costs and expenses incurred by the lender in connection with the negotiation, preparation, printing and execution of the amendment document up to a cap of 295,000 dollars.

Mr Seth Terkpeh, Minister of Finance, therefore moved the motion for the approval of the loan agreement.

Dr Anthony Akoto Osei, Ranking Member of the Finance Committee, asked the majority leadership to ensure that contract between Government of Ghana and the gas project in the Western Region with Sinopec was brought before the House for approval.

Mr Edward Doe Adjaho, Speaker, said it was time Parliament engaged the necessary stakeholders on some of those challenges and how to avoid them.

Earlier, the Ghana Investment Promotion Center Bill, 2013, was read the second time and a report of Ghana’s representatives to the Community Parliament of ECOWAS on the First Ordinary Session of the Third Legislature of the ECOWAS Parliament was presented.

It was held in Abuja, Nigeria, from May 6- 21, 2013.