Ghana signs four billion dollar MoU with Chinese company

Godwill Arthur-Mensah, GNA

Accra, July 13, GNA – 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 four billion dollars.

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

This brings to 19 billion dollars 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

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

“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 US$4 billion,” part of the MoU

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 signalling
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 one billion dollar to Exim Bank Ghana to support infrastructure and
business development.

“China Railway International Group Limited
signed MoU to provide 10 billion dollars 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.”


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