IMF Blocks $300 Million Grant To GNPC

Sekondi (Western Region) 24 May ?99

Delays in the release of $300 million to the Ghana National Petroleum Corporation (GNPC) may adversely affect the pace of development of the Western Power Project.

The project is a GNPC initiative to produce electric power using in the short-term crude oil, and in the long-term liquified gas.

It is expected to generate about 125 mega watts of power to supplement power production to meet the growing needs of Ghanaians and perhaps for export.

The agreement for the grant was signed in November 1998 between the GNPC and Exim Bank of the United States.

The grant is needed to complete work on the whole Western Power Project.

Mr Tsatsu Tsikata, Chief Executive of the GNPC, told members of the Institute of Financial and Economic Journalists (IFEJ) during a familiarisation tour of the GNPC's facilities at Sekondi last Friday that the International Monetary Fund (IMF) has ordered the suspension of the grant.

The tour took members of IFEJ to Esiama, Mangyea, Effaso, Sekondi and Aiyinase in the Western Region.

Mr Tsikata said due to the suspension order the Exim Bank has not been able to grant the facility.

He said the Exim Bank has demonstrated its readiness and willingness to assist the GNPC to bring the project to fruition.

Mr Tsikata said various studies conducted proved the viability of the project.

He was optimistic that when the $300 million grant is made available, the project will be completed within 12 months.

Mr Tsikata said without the grant, it will take about three more years to arrange for funding to complete the project, adding that.the Japanese Government is assisting the project with a 100- million-dollar grant.

Mr Lloyd Evans, President of IFEJ, said the institute is committed to improving upon standards of economic and financial reporting in the country.

He was hopeful that the trip would give members of IFEJ insight into the activities of GNPC and the development of the country as a whole.

Mr Evans expressed the appreciation of the financial journalists to the GNPC for sponsoring the tour.