HomeIndustry SectorsFinance and PolicyGhana approves US$3 billion Chinese loan

Ghana approves US$3 billion Chinese loan

Rig involved in the
production of the first
oil from Ghana’s Jubilee
oilfield last December
Accra, Ghana — ESI-AFRICA.COM — 29 August 2011 – The Ghanaian parliament has approved a US$3 billion Chinese loan, and the country’s finance minister says the West African state is in talks with China’s Exim bank for loans worth another US$6 billion.

The money is part of a total US$13 billion package in agreements “’ signed in September 2010 between Ghana and the China Development Bank and China Exim Bank “’ aimed at developing infrastructure projects, particularly in the oil and gas sector.

The Ghanaian government has said that it plans to use the money to finance infrastructure projects and transform its economy through gas- and oil-driven industrialisation.

Deputy speaker of the Ghanaian parliament Doe Adzaho said the bill had been approved by acclamation, so no vote was needed.

“We have started the negotiations on the $6 billion loan and it is going well,” finance minister Kwabena Duffuor said, adding that the details would be put before parliament after work was completed on the current US$3 billion facility.

He explained that the loans were among the biggest so far contracted by Ghana, but were comparatively cheaper than floating a Eurobond.

A parliamentary report seen by Reuters said Ghana would repay the US$3 billion loan at an interest rate of six-month Libor plus 2.95 percent. It would also pay an upfront fee of 0.25% and commitment fees of 1% per annum.

Ghana, the world’s second largest cocoa grower, became the continent’s newest oil producer when it started pumping oil from its Jubilee field in December last year.