Completed Mixed AidData Chinese Aid

China Eximbank provides $6.4 million export seller's credit to CWE for Volta Lake Resettlement Township Electrification Sub-Project of the Upper West Electrification Project (Linked to Record#1243)

¥6.4M RMB

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	China International Water and Electrical Corporation (CWE)
Country	Ghana
Start Date	Mar 02, 2000
End Date	Apr 04, 2033
Duration	12,086 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`73183`

Grant Description

China Eximbank provides $6.4 million export seller's credit to CWE for Volta Lake Resettlement Township Electrification Sub-Project of the Upper West Electrification Project On March 2, 2000, the Government of Ghana signed a supplier's credit agreement worth $29,538,782.55 with China International Water & Electric Corporation (CWE) for the Volta Lake Resettlement Township Electrification Sub-Project of the Upper West Electrification Project.

The CWE supplier credit was provided through an RMB-denominated tranche (RMB 162 million) and a USD-denominated tranche ($6.4 million).

📋 Loan / Grant Terms

📅 Maturity10 years

⏳ Grace Period3 years

💹 Interest Rate2%

Record ID#1243 captures the RMB-denominated loan tranche and Record ID#73183 captures the USD-denominated loan tranche.

In order to finance its supplier's credit agreement with the Government of Ghana, CWE in turn secured an export seller’s credit on September 8, 2000 from China Eximbank with an 11-year maturity.

The proceeds of both loan tranches were to be used by the borrower to finance 90% of the cost of a $32,820,869.51 commercial contract between the Government of Ghana and CWE. The Government of Ghana was required to contribute the remaining 10% ($2.8 million dollars) as counterpart funding.

The purpose of the project was to provide electricity to 106 'resettlement towns' (townships) in the Brong Ahafo, Eastern, Northern, and Volta Regions of Ghana under the Volta Lake Resettlement Scheme.

By way of background, during the construction of the Akosombo and Kpong hydroelectric project, the Volta River Authority (VRA) built a number of townships with the necessary infrastructure and institutional services for the resettlement of over 100,000 persons whose villages were submerged.

The resetllement towns were built between 1963 and 1982 in the Brong Ahafo, Eastern, Northern, and Volta Regions of Ghana.

At the time of the resettlement, VRA was not able to provide electricity to most of the communities because they were far from the VRA grid substations and the Electricity of Ghana (ECG) sub-transmission and distribution networks.

A feasibility study for the project was completed in July 1999 and it identified 171 'resettlement towns' (townships) that still required electricity.

However, due to the large number of towns involved, the Volta Lake Resettlement Township Electrification Sub-Project of the Upper West Electrification Project was carried out in phases. CWE was the contractor responsible for the implementation of the first phase. Construction began in 2002 and ended in 2003.

However, the precise commencement and completion dates of Phase 1 are unknown.

📋 Staff Comments

The Chinese project title is 的沃尔特湖移民村镇电气化项目.
Some media sources indicate that Ghana’s Parliament approved the supplier credit agreement in December 1999 rather than March 2000. However, the Government of Ghana’s Controller & Accountant General's Department records the loan commitment year as 2000.
AidData has estimated the default (penalty) interest rate by adding 1% to average 6-month LIBOR in March 2000 (6.39394%).
In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it records a maturity of 11-years for this supplier credit but does not record an interest rate or grace period. AidData records the maturity (10-years), interest rate (2%), and grace period (3-years) reported at the time that Ghana’s Parliament approved the supplier credit (see https://ir.parliament.gh/bitstream/handle/123456789/3667/REPORT~1.PDF?sequence=1&isAllowed=y). The 11-year maturity recorded by SAIS-CARI appears to refer to the term of the export seller’s credit that CWE secured from China Eximbank rather than the term of the supplier credit that CWE provided to the Government of Ghana.

📚 Sources & References

Parliament Approves Four Loan Agreements
Annual_Accounts_2013_Part_3, 2012_ANNUAL_ACCOUNTS, 80 rural communities to benefit from electrification project
NATIONAL ELECTRIFICATION SCHEME (NES) Master Plan Review (2011-2020)
中国进出口银行为中国水利电力对外公司提供出口卖方信贷
中水电公司承建电气化项目助力加纳“光明工程”, 【国际商报】“光明工程”架起中加友谊桥梁
Report of the Finance Committee on the Concessional Loan Agreement of US$29,538,782.55 between the Republic of Ghana and China International Water and Electric Corporation to Finance the Extension of Electricity to 106 Resettlement Towns under the Volta Lake Resettlement Towns Project
Electricity For 580 Communities
House urges the government to source funding for electrification
Hydropower development and Resettlement (Ghana) Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.