Electricity Supply Equipment Loan Agreement Approved

The republic of Ghana Parliament has approved a supplier’s credit agreement between Ghana and the China International Water and Electricity Corporation for an amount of 162,000,000.00 dollars.

The amount is for the supply and installation of materials and equipment under the national electrification scheme for the Volta and other regions as an extension of the Upper West Electrification project.

Mr James Klutse, Chairman of the Finance Committee who read the committee’s report, said the credit is to finance the supply and installation of electrical materials and equipment under the National Electrification Scheme to extend the scope of works of the Upper West Electrification project to cover projects in the Volta and six other regions.

The loan has a four-year grace period, 11 years repayment period, maturity period of 15 years, interest rate covers US 6 Month Libor+0.8 percent per annum and a grant element of 35.90 percent.

The report also noted that Government of Ghana counterpart funding of $18million will be spread over the project execution period of the three years and that the first tranche have been included in the 2011 budget.

The report again stated that under the SHEP 4 Phase I project, costing $90 million and executed by CWE, 420 communities were connected to the national electricity grid and additionally, 531 communities were connected under SHEP 4 Phase 2 at the cost of 170 million.

The report explained that the additional credit of $162 million had become necessary because the contractor did not adhere to proper project management procedures and therefore started installation works in several communities which had not been earmarked under the $170 million project package.

The scope of the project involves design, manufacture, delivery, installation, completion and commercialisation of the electrification project. It would be disbursed in two tranches of $81 million each with the first in 2011 financial year and the other tranche in the 2012 financial year.

Source: GNA