Ghana, Korea sign $200m loan agreement

Ghana has signed a framework agreement with the Republic of Korea for a concessional loan of $200 million. 

The fund, which will be disbursed from Korea’s Economic Development Cooperation Fund (EDCF) to Ghana between 2017 and 2019, will cover five projects.

The concessional loan comes with a 10-year grace and 25 years repayment periods, at an interest rate of about 0.5 per cent.

At the signing ceremony last Friday, the Finance Minister, Mr Ken Ofori-Atta, said; “This loan is really crucial because as you know, we are in the Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF), which dictates quite a bit of consolidation and the type of funding that is required.”

He added that the strategy of the government was to reduce interest payments, which made concessionary loans such as the EDCF facility important in creating fiscal space.

The Korea Ambassador to Ghana, Mr Lyeo Woon-Ki, expressed the hope that the signing of the framework agreement would continue to strengthen the bilateral relationship between the two countries.

He said Korea was willing to support Ghana’s economic development, particularly in the productive areas of information and communications technology, healthcare delivery, education and high-tech transport infrastructure.

EDCF

Mr Lyeo said the EDCF programme was already financing two projects in the country. 

“The first project is the Wa Water Supply System Development Project which will be completed in April this year,” he said, adding that the Korea Exim Bank which opened a representative office in Ghana in 2015, provided $55 million financing. 

The other was the Prestea-Kumasi Power Enhancement Project, a $67 million financing which was expected to be completed by 2018, he added.

Bilateral relations

Ghana and Korea will mark 40 years of bilateral relations this year and Mr Lyeo expressed the hope that moving forward, the relationship would continue to flourish. 

Way forward

Mr Ofori-Atta said the priority areas for the country were agriculture, industrialisation and job creation, adding that Ghana was looking forward to expanding and deepening its relationship with the Korean Exim Bank.

The finance minister thanked the government and people of Korea for their immense support for the country’s development programmes, adding that Ghana and Korea were working on a double taxation agreement which would be finalised soon.