Parliament Approves Four Loan Agreements

Accra, Ghana (PANA) - Ghana's parliament has approved a 29.5-million-US- dollar Chinese concessionary loan contracted by the government to finance the extension of electricity to 106 towns under the Volta Lake Resettlement scheme.

The loan, which is repayable in 10 years at 2 percent interest rate with a three-year moratorium, is under an agreement between the government and the China International Water and Electric Corporation.

During the construction of the Akosombo and Kpong Hydro-Electric dams, the Volta River Authority built a number of townships between 1963 and 1966 and 1979 and 1982, for the resettlement of more than 100,000 persons, whose villages were submerged.

At the time the resettlement towns were established, the authority was unable to provide electricity to most of these communities, because they were far from its grid sub-stations and the sub-transmission and distribution networks of the Electricity Company of Ghana.

Feasibility studies identified a total of 171 townships along the Volta Lake to benefit from the project, but due to the large number of towns involved, the project has to be carried out in phases.

The first phase, which involves the electrification of 106 communities, is estimated at 32.8 million dollars, but the Chinese corporation is providing 29.5 million dollars, representing 90 percent of the total cost.

The government is required to contribute the remaining 10 percent in the amount of 2.8 million dollars as counterpart funding for the project.

Parliament has also approved three other loans contracted by the government for a number of socio-economic projects in the country.

One is an additional 2.8 million dollars Swedish loan for the electrification of the Greater Accra and Volta regions.

The second is a 11.5-million-dollar loan from the International Fund for Agricultural Development for the second phase of the Upper East Land Conservation and Small Holder Rehabilitation Project and the third is a 19.59- million Dutch guilder loan to partly finance technical/vocational education and training resource centres.