Discussions with China has no negative implications – Finance Minister

Mr. Seth Terkper

Mr. Seth Terkper

The Minister of Finance Seth Terkper has confirmed that the government is in discussions with the government of China to access the remainder of the $3billion for energy and infrastructure.

This loan he said would be repaid by leveraging revenue flows from lean gas from the Jubilee oil field.

“Currently, there is a task force which is working with the Ministry of Finance and the power ministry to continue the negotiations with the China Development Bank in order that the CAP $1.5 billion that was placed is removed,” he said.

Speaking in an interview with the Times in Accra yesterday he dismissed suggestions that the deal would have negative implications for the country but rather it would help in the execution of infrastructure projects without burdening the tax payer.

The New Patriotic Party (NPP) at a press conference on Wednesday accused the Mahama-led cabinet of approving a proposed agreement which could see Ghana offering its gas to China in a bid to lure the China Development Bank to reactivate the reaming $1.5 billion of the $3 billion to the Ghanaian government.

The opposition party claimed that the agreement has bleak implications on the future of Ghana.

The agreement if successful could see Ghana offer one of the country’s gas fields to China for a period of 19 years starting in 2018.

Mr. Terkper said the CDB disbursed $1 billion of the $ 3 billion and the government placed a CAP on the $1.5 billion.

“It should be noted that CDB has disbursed approximately $1 billion for the Atuabo Gas Plant pipelines from the Jubilee field and other infrastructure,” he said.

He said the mandate of the taskforce headed Mr. Ato Ahwoi was to discuss further utilisation of the outstanding $500 and the remaining $1.5 if possible because these are already covered by agreement.

He said discussions with China would not be centered only on the CDB facility but other important projects would be put on the table.

“The premise of the CDB facility is in tune with our self-financing strategy, which states that proceeds from any commercial project must be used to pay for the loans which financed the project, not paid from taxes as public debt,” he said.

Mr. Terkper said “revenue from crude oil sold at international market price at Brent benchmark price and the resources are repatriated to the Bank of Ghana and used to service the facility. When the crude oil prices fell, that, sources of financing the loan became inadequate and that is why disbursement of the entire was stalled.”

The minister said “however, it is always envisaged that the potential for the energy sector in Ghana is not always just crude, it includes gas and lean gas which is under reference now. Hence, other sources of financing the facility include revenues from crude and lean gas. This will ensure that the loan is not put on the tax payer to increase public debt, the projects will pay for themselves.”

This he said was in consonance with the government’s focus on stating that state institutions follow the COCOBOD in using the proceeds from projects to repay loans.

“This is being done by Ghana Airport Company which is using the airport tax and other charges to develop the airport,” he said.

By David Adadevoh


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