Ghana signs $4b MoU with Chinese company

Government has signed a Memorandum of Understanding (MoU) with Sinohydro Corporation Limited, an energy firm, for the execution of a number of key projects across the country at an estimated cost of $4 billion.

The Chinese state-owned company would, among other things, undertake projects including a multipurpose hydro at Pwalugu, a Volta Lake Transportation, an Accra Flood Prevention, as well as other priority infrastructure projects like garbage treatment plants, solar power plants and rail.

This brings to $19 billion the commitments made by the Chinese Government and its agencies following the acceptance of the financing model proposed by Ghana’s Vice President, Dr Mahamudu Bawumia, during his recent state visit to the People’s Republic of China.

The deal involved the leveraging of a fraction of Ghana’s bauxite deposits.

The MoU was signed by the Senior Minister, Mr Yaw Osafo-Maafo, on behalf of the Government while Mr Chen Zhenrong, a representative of Sinohydro in Ghana, signed for his company in Accra on Thursday.

“Sinohydro has made representations to Ghana that the financing model proposed by Ghana is acceptable to her and that it has the technical capability, the competencies, the experience, the financial capacity and other resources to finance and execute the projects proposed in this MoU and to be determined totalling up to $4 billion,” part of the MoU read.

According to the terms of the MoU, the proposed projects shall be executed in accordance with specifications and standards approved by the Government while Sinohydro will act as the principal project development partner and work through local companies with significant Ghanaian participation.

It would be recalled that the Vice President, Dr Mahamudu Bawumia, after a four-day official visit to China, announced the signing of a number of MoUs with Chinese state actors to provide financing for a number of infrastructure projects in Ghana to be funded by the exploitation of some of Ghana’s minerals, particularly bauxite.

Briefing the media on the visit, Vice President Bawumia said: “Our trip was purposeful. We came back with some leading Chinese companies and agencies of the Chinese Government signaling their interest in our agenda and with agreements totalling $15 billion, with the possibility of a further $4 billion in the near future.”

Giving a breakdown of the agreements, Vice President Bawumia said: “The China National Building Materials and Equipment Import and Export Corporation (CNBM) signed a two billion-dollar facility with the private sector, led by the Association of Ghana Industries, to provide funding for the ‘One District One Factory’ programme.

“China Development Bank agreed to unfreeze a two-billion loan and signaled their willingness to re-negotiate it into a concessionary facility with a grant element, an extended maturity and at a much lower interest rate.

“The China Exim Bank is committed to providing about $1 billion to Exim Bank Ghana to support infrastructure and business development.

“China Railway International Group Limited signed MoU to provide $10 billion to support the components of a massive infrastructure development programme spanning the mining, industrial and railway fields.

“We are undertaking all of these projects not by borrowing but with less than five percent of our refined bauxite reserves.”

Source: GNA

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