A buyer's credit facility agreement worth EUR 74.1 million for the Tarkwa Water Supply Project has been approved by Parliament.

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A commercial contract worth €65 million plus the associated €9.1 million Credendo premium for the Belgian Export Credit Guarantee makes up the total.

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The Project involves KBC Bank NV and Commerzbank AG (as arrangers and original lenders) are involved (as agent).

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By increasing the capacity of the existing Bonsa Water Supply System and extending service to neighbouring communities like Bonsa/Bonsaso, Bankyem, Charliekrom, Efuanta, Kwabedu, Mantrem, Agona Wassaw, and Nsuta, this project aims to improve the availability of potable water to the people of Tarkwa and the surrounding area.

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Tamso, Fanti Mines, Senyaekurase, Akyempem, Simpa, Dompin-Papase, Brofroyedu, Atoabo, Aboso, the University of Mines and Technology, and other communities make up the rest.

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To meet the current demand of 15,000m3/day (3.3MGD) and the projected water demand for the Municipality in 2040, the Project will increase the capacity of the existing water supply system from 2.8m3/day (0.6MGD) to 27,000m3/day (6MGD).

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Upon handing over each fully functional component to the client, a 12-month defect liability period will begin counting down from the project's anticipated completion date of 36 months.

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Parliamentary Finance Committee Chairman Kwaku Agyeman Kwarteng, who introduced the motion to approve the loan, argued that the Committee, after reviewing the Agreement in detail, was convinced that the Facility, if approved, would help expand access to water in Tarkwa and its surrounding areas.

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The motion was seconded by Dr. Cassiel Ato Baah Forson, the Ranking Member for the Finance Committee, who said that they had been informed that the Government of Ghana would be paying a commitment fee of 0.4% and an upfront fee of 1% to support the Tarkwa Water Supply Project.

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“Mr Speaker, my concern relates to the fact that the Government of Ghana is taking a loan of €65 million but we are paying an insurance premium of €9.1 million,” he said.

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“Mr Speaker, this means that the insurance for the facility alone is 14 percent of the loan amount, I recognise that, this is high but I will only urge the Ministry of Finance going forward to start working on our insurance premium.”

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

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The loan itself, he said, was inexpensive, but the insurance premiums were something Ghanaians should be concerned about.

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He also voiced his displeasure over the fact that the Finance Ministry had not conducted a value for money audit prior to the loan's implementation.

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The Majority Leader, Mr. Osei Kyei-Mensah-Bonsu, agreed with the Ranking Member on the value for money audit and said that it was time for Parliament to start using the services of experts to conduct such audits before approving loans.

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Source: The Independent Ghana

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