Ghana to receive remainder of CDB $3bn loan – Bawumia

This was revealed by the Vice President Dr Mahamudu Bawumia at a press conference after arriving from a four-day official visit to China.

He said he “met with the Vice President of the China Development Bank and we were able to successfully negotiate the reactivation of the remainder of the entire loan that was given to Ghana.”

“Under the previous government, there was a $3 billion master facility that was given to the government. $1 billion or so was disbursed for the Atuabo Gas Plant but the remaining $2 billion or so was frozen for certain reasons.”

“We were able to successfully discuss and address some of the concerns and they have agreed to discuss and address some of the concerns and they have agreed to technically unfreeze that amount,” Dr. Bawumia said.

Following the approval by the International Monetary Fund Board to increase Ghana’s commercial borrowing ceiling from US$$800 million to US$3.4 Billion on December 14, 2011, the Master Facility Agreement (MFA) on the loan was signed on December 16, 2011.

The loan agreement was approved by Parliament in August 2011 amid concerns over the terms and conditions of the agreement, particularly, the collateralization of oil against the loan.

Before the NPP took over office, the current Energy Minister Boakye Agyarko accused the Mahama-led government of approving a proposal to lure the CDB to unfreeze the remaining $2 billion of the $3 billion loan.

In the original Master Facility Agreement, the government committed to supplying, as collateral security, 13,000 barrels per day of crude oil up to 2027 to service the CDB facility, according to him.

However, the Chinese considered this deal unsatisfactory because of the slump in oil prices, and therefore the remaining tranches were not released.

In making a new offer to the CDB, the government proposed the export of all the Natural Gas Liquids to be processed by the Ghana Gas processing plant at Atuabo from 2018, estimated at the value of $1.5 billion.

The then Minister of Finance, Seth Terkper, who confirmed Mr. Agyarko’s claims, said the offer was to involve gas, for a period of 19 years, starting in 2018.

Mr Terkper was quick to add that the deal will not have bleak implications on Ghana. He said the gas being offered would be drawn from only one of Ghana’s three gas fields.