Parliament has approved a 60 million dollar loan being procured by the government of Ghana for the Electricity Company of Ghana (ECG).
The Agreement was passed amidst opposition from the Minority on concerns over the terms by which government will lend the money to ECG to implement the project, which is expected to extend electricity to rural areas.
The loan is to upgrade the distribution network of Ghana’s power distributor but the opposition in Parliament insists the terms and condition of the facility are too costly for the ECG. Speaking on the floor of the House, the Minority Spokesperson on Finance, Dr Anthony Akoto Osei described the terms of the on-lending agreement to ECG as unfair.
“The interest is too onerous, 5% is too commercial…is government now a commercial bank?” he asked, adding that ECG is broke” and granting it that loan will sink it. He wondered why the government will adopt such a strategy to procure loans for an institution that is facing financial challenges.
ECG can pay loan – Mona Quartey
The Deputy Minister of Finance, Mona Quartey however justified the terms of the agreement saying the ECG has the capacity to pay back the money on the terms government is offering. “The ECG is not broke. It may have some cash management issue but it is not broke.
They will be able to service this particular facility and therefore they will be able to pay the interest rate that we have agreed with them and within the grace period therefore there is no transactional problem,” she said.
Parliament approves four loans
On Monday, four loans sent to Parliament by government was approved by the 275-member body.
The four loans included an 11 billion Japanese yen (equivalent to 112 million dollars), through its International Corporation Agency (JICA), for the construction of a bridge across the Volta River at Volivo, $83 million for the Accra Urban Transport Project and a 13 million euro loan and another 3 million euro for the provision of facilities and ICT equipment for the offices of the Ghana Audit Service nationwide.