Parliament has approved an agreement for €74,145,500 to finance the Tarkwa water supply project in the Western Region.
The Credendo Covered Buyer’s Credit Facility Agreement between the Government and KBC Bank NV (as Agent) and COMMERZBANK AG (as arrangers and original lenders) were unanimously approved by the House on Thursday.
The Credendo Covered Buyer’s Credit Facility is made up of €65 million and the associated Credendo premium of €9,145,500.
Members of Parliament (MPs) also gave their backing to the Commercial Contract between the Government (represented by the Ministry of Sanitation and Water Resources) and JV Besix-Denys for the same project at a cost of €65 million.
The loan agreement has a grace period of three years and a tenor of 13 years, while interest rate is 6M Euribor+1.10% per annum and an upfront fee of 1% flat of the facility amount, all totaling 3.13% per annum.
The agreement was presented to the House on Tuesday May 31, 2022 in accordance with Article 181 of the Constitution and Section 56 of the Public Financial Management Act, 2016, Act 921, and pursuant to Article 103 of the 1992 Constitution and Orders 169 and 171 of the Standing Orders of the House, the agreement was referred to the Finance Committee for consideration and report.
The government said the credit facility would enable it to expand the water supply system in Tarkwa to address the gaps in water supply and demand in the town and its surrounding communities.
The Finance Minister, Ken Ofori-Atta indicated that the project is in pursuit of the Government’s policy to ensure access to potable water for all by the year 2030 and in line with the United Nations’ Sustainable Development Goal 6.
According to him, the existing Bonsa water treatment plant which was constructed in the 1970s has not been rehabilitated and expanded to meet the ever-increasing water demand of the supply area.
Tarkwa is the capital of the Tarkwa-Nsuaem Municipality in the Western Region with a population of about 90,477, and the Government said the Municipality is projected to experience a rapid population growth as the town continues to discover greater potentials for socio-economic growth.
“The rapid rate of socio-economic transformation in Tarkwa and the surrounding communities has, however, not been matched by an increase in the delivery of water supply and other basic services; thereby threatening the health and sustainable growth of the Community,” the Finance Committee stated in its report.
The report noted that the existing Bonsa water Supply System is based on the abstraction of surface water from River Bonsa and augmented by boreholes.
“The current capacity of the current water supply is averagely 2.800m3/day (0.62 MGD} (from surface water and boreholes) although the present demand is about 15,000m3/day (3.3 MGD), and this has created demand-supply gap of about 12,200m3/day (2.48MGD),” the report intimated.
By Ernest Kofi Adu, Parliament House