Government has secured US$122,734,000 from the Export-Import Bank Korea (Korea Exim Bank) of the Republic of Korea to implement two development projects in the country.
The signing of the two agreements in Accra paves the way for execution of the Economic Development Cooperation Fund (EDCF) loan agreement in respect to the two projects.
Under the first agreement, US$55.5million is to be used for implementing the Wa Water Supply System Development Project to improve the existing water supply situation of Wa and eliminate the incidence of guinea-worm in the Wa Municipality.
The loan has a 40-year repayment period — including a grace period of 10 years, an interest per anum of 0.05 percent, and a counterpart funding of 15 percent of total project cost.
The second agreement involves a US$67,234,000 loan to implement the Prestea-Kumasi power enhancement project. The loan will enable the Ghana Grid Company Limited (GRIDCO) to develop 330kv Prestea and Kumasi Substations under the 330kv Prestea and Kumasi Transmission Line Substation Project.
This loan arrangement has a 35-year repayment period inclusive of a 10-year grace period, 0.5 percent interest rate per anum and a counterpart funding of 15 percent of the total project cost.
“Ghana has had good bilateral relations with the Republic of Korea since 1978. It is our hope that this loan arrangement will help deepen the bilateral relations that exist between Ghana and South Korea.
Bilateral trade between the two countries increased by 50 percent to US$754m in 2011,” Dr. Kwabena Duffuor, Minister of Finance who signed on behalf of government, said.
Dr. Duffuor appealed to the government of the Republic of Korea and Korea Exim Bank to consider and approve other pending EDCF loan requests in respect to the Techiman Water Supply Rehabilitation Project, the WIBRO ICT Project, and the Vocational Training Centres within “the shortest possible time”.
The Ambassador of the Republic of Korea to Ghana who signed on behalf of his country, Mr. Kyun Jea Min, said the two loan agreements are the “first signature of EDCF agreements between Korea and Ghana since the agreement on the oil pipeline between Buipe and Bolgatanga was signed in 2003”.
Mr. Min noted that though there were a few challenges, “today the two countries can officially acknowledge that they overcame those challenges by signing new EDCF agreements.
“Korea designated Ghana as a priority country for Overseas Development Assistance (ODA) including long-term loans and grants for the period of 2100 to 2015.
Accordingly to this designation, Korea considers unprecedented increases of ODA for Ghana infrastructure building and socio-economic development for the said period,” Mr. Min said.
By Dominick Andoh
