Parliament approves €74.1m loan deal for Tarkwa water project

Parliament has approved a €74.1m buyer’s credit facility agreement for the Tarkwa water supply project.

The amount is made up of 65 million euros for a commercial contract and the associated Credendo premium of 9.1 million euros for the export credit guarantee from Belgium.

It involves KBC Bank NV and Commerzbank AG (as arrangers and initial lenders) and KBC Bank NV (as agent.

The project aims to expand access to clean water supply for residents of Tarkwa and its neighboring communities by increasing the capacity of its existing Bonsa water supply system and extending access to neighboring communities such as Bonsa/Bonsaso, Bankyem, Charliekrom, Efuanta, Kwabedu, Mantrem, Agona Wassaw and Nsuta.

The others are Tamso, Fanti Mines, Senyaekurase, Akyempem, Simpa, Dompin-Papase, Brofroyedu, Atoabo, Aboso, University of Mines and Technology and other colonies.

The project will increase the capacity of the existing water supply system from 2.8 m3/day (0.6 MGD) to 27,000 m3/day (6 MGD) to meet the current demand of 15,000 m3/day (3 .3 MGD) and also to meet projected water needs. request from the Municipality for 2040.

The project is expected to be completed in 36 months with a defect liability period of 12 months from the handover of each complete item to the client.

Mr. Kwaku Agyeman Kwarteng, Chairman of the Parliament’s Finance Committee, who proposed the motion to approve the loan, said that the committee, after careful consideration of the agreement, was confident that the facility, once approved , would help expand access to water in Tarkwa. and surroundings, and therefore recommended to the House for approval.

Finance Committee member Dr Cassiel Ato Baah Forson, who seconded the motion, said the terms of the loan facility were 1.1% plus six-month Libor, and that they had been advised that the Government of Ghana would pay a commitment fee of 0.4% and an initial fee of 1% to support the Tarkwa water supply project.

“Mr. President, my concern is that the government of Ghana is taking out a loan of 65 million euros but we are paying an insurance premium of 9.1 million euros,” he said.

“Mr. President, this means that the insurance for the establishment alone is 14% of the loan amount, I recognize that is high, but I will only urge the Ministry of Finance to start working on our insurance premium.

“Mr. President, it looks like Ghana is paying so much insurance on some of these export credit agency loans.”

He said the loan itself was quite cheap but the associated insurance was something Ghanaians should be worried about.

He also expressed concern that the value for money audit had not been carried out by the Ministry of Finance before the entry into force of the loan.

Mr. Osei Kyei-Mensah-Bonsu, Majority Leader in Parliament, who agreed with the ranking member on the value for money audit, noted that in the future, it is high time Parliament to start contracting the services of experts to carry out value for money audits. before the loans are approved by the House.

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