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Ghana cannot payback $2bn Sinohydro loan-ACEP

The African Centre for Energy Policy (ACEP) has cast doubts about the country’s ability to honour its commitments regarding the $2 billion barter agreement with China if it relies solely on revenue from the proposed Integrated Aluminum Industry.

The assertion is based on research conducted by ACEP on government’s plan to keep the Sinohydro deal afloat.

Parliament in July 2017 approved the Master Support agreement between Ghana and Sinohydro Corporation Limited for the construction of priority infrastructure projects to be serviced with refined bauxite.

But according to ACEP’s analysis, the repayment plan may not play out as expected.

The Executive Director of ACEP, Ben Boakye in an interview with Citi News said with the five million tonnes of bauxite expected to be mined and about two million, five hundred thousand tonnes of alumina to be extracted, Ghana stands to gain only one hundred and twenty five thousand of the alumina which when traded will give the country about $48 million, an amount woefully inadequate to meet the $260 million per year commitment Ghana made in the Sinohydro deal.

We say we are going to produce 5 million tonnes of bauxite and the peaks of it can give you about 2.5 million tonnes of alumina. Assuming that a company will mine and refine and give you alumina benefits, what Ghana will get from that is about 125,000 tonnes of alumina. If you trade that on the market, what Ghana is going to get  is about $48m.”

“What Ghana is going to get is about $48 million yet our commitment to repay the loan is about $260million every year so that raises a fundamental question about how  we are going to pay the money every year for the $2billion.”

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